Preamble

The House met at Half-past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — ROADS

Speed Limit (Goods Vehicles)

Sir Wavell Wakefield: asked the Minister of Transport if he has any statement to make in connection with the alteration of the speed limit for goods vehicles from 20 m.p.h. to 30 m.p.h. for heavy goods vehicles on pneumatic tyres.

The Minister of Transport (Mr. Barnes): I would refer the hon. Member to the answer I gave on 1st November to a Question by the hon. Member for Buckrose (Mr. Wadsworth), of which I am sending him a copy.

Pedestrian Crossings

Lieut-Colonel Sir Thomas Moore: asked the Minister of Transport whether he will consider publishing simple instructions clarifying the existing law regarding priority of usage between pedestrians and motor traffic at studded street crossings.

Mr. Barnes: The provisions of the Pedestrian Crossing Places (Traffic) Regulations, 1941, are clearly summarised on page 28 of the Highway Code. I have asked the Committee on Road Safety to examine the question of the use and observance of pedestrian crossing places, and when they have reported I will consider whether the regulations can be improved.

Sir T. Moore: Would the right hon. Gentleman bear in mind that the present position is quite chaotic, that the issue is constantly between weight and agility, that the odds are, generally, on weight—that is, on the motor vehicle—and that the pedestrian has to suffer?

Mr. Barnes: I would not agree that the conditions are chaotic. It is laid down quite clearly in the orders issued that the pedestrian has the right of way with regard to pedestrian crossings.

Sir T. Moore: The pedestrian may have the right of way, but if the motor vehicle persists in going on, he has to be very quick to get out of its way.

Mr. Barnes: I would point out that a fine is imposed if the conditions are infringed.

Mr. Skeffington-Lodge: Would my right hon. Friend commend to other areas the very excellent arrangements which exist in Kensington High Street? They are first-class in that part of London.

Mr. Barnes: The rules and regulations are no different in Kensington High Street from elsewhere.

Vice-Admiral Taylor: Can the Minister tell us whether, where there are lights on the crossings, the pedestrian has the right to pass whether those lights are green or red?

Mr. Barnes: No, Sir, the pedestrian has not that right when the lights are against him.

Traffic Signals, Brixton

Lieut-Colonel Lipton: asked the Minister of Transport whether he will authorise the reinstatement of the traffic control signals at the junction of Lough-borough Road, Angell Road and Brixton Road, which have not been operating since the war.

Mr. Barnes: The reinstatement of these signals has already been agreed upon, and I understand that the local authority have ordered the necessary equipment.

Lieut-Colonel Lipton: Is my right hon. Friend aware that this agreement will be very welcome to the many pedestrians who have to use this crossing?

Oral Answers to Questions — TRANSPORT CONSULTATIVE COMMITTEES

Mr. McAdam: asked the Minister of Transport what progress is being made in regard to the setting up of the Consultative Committees provided for under the Transport Act.

Mr. Barnes: I have now received nominations from the representative bodies which I have consulted in connection with the establishment of the Central Transport Consultative Committee. I expect to be in a position in the very near future to announce the setting up of the Central Committee and also the names of the chairmen of the committees for Scotland and Wales.

Mr. McAdam: Will my right hon. Friend speed up the appointment of these Committees in view of the fact that the British Transport Commission are already engaged in large schemes of reorganisation, and that the Consultative Committees ought to have a say in such reorganisation?

Mr. Barnes: The important thing, of course, is to get the right people.

Oral Answers to Questions — MINISTRY OF SUPPLY

Surplus Machine Tools (Sale)

Captain John Crowder: asked the Minister of Supply whether he will now discontinue the sale by auction of surplus machine tools which would be required for essential production in the event of the outbreak of war.

The Minister of Supply (Mr. G. R. Strauss): No machine tool is sold if it is required as a reserve or for other Government purposes.

Captain Crowder: Did the Minister read the article in the "Daily Graphic" of last Saturday which was headed "Our War Tools for the Iron Curtain"; and further, is there any restriction on the export of machine tools bought by auction?

Mr. Strauss: Yes, Sir, they are all subject to restriction and come under a Board of Trade order.

Mr. Erroll: Is the Minister aware that a number of machine tools are finding their way to Palestine by similar devious channels?

Sir Waldron Smithers: Will the Minister undertake that none of these machine tools will be sent to Russia?

Mr. Strauss: I have said that no machine tools required in this country for reserve, and, indeed, none required for making munitions, are exported.

Dumped Radio Equipment

Mr. Hugh Fraser: asked the Minister of Supply whether he is aware that 36,000 pieces of radio equipment dumped by his Department in a disused pit shaft at Cheadle, Staffs, and declared in the House of Commons by his predecessor on 17th December, 1945, to be valueless, have now been recovered after the shifting and replacing of 200 tons of dirt and disposed of by private enterprise at a profit; and whether he will investigate the reasons for the original decision and make a statement on the matter.

Mr. G. R. Strauss: About 10,000 radio transmitters and transmitter receivers were dumped in this shaft. I cannot say how many were recovered, but I understand that no pieces have been removed since September, 1946, when an undertaking was given in an action in the


High Court that no further equipment would be taken from the pit, which was then closed. When it was decided to dump these sets the question was whether it would have been economical to break them down for recoverable components. It was not considered economical to do so as they were damaged military types, unsuitable for civilian use, and at that time large quantities of serviceable parts were being sold competitively to the trade. In present conditions no set would be destroyed or dumped unless it was considered advisable on security grounds or unless it had been proved that there was no market for it.

Mr. Fraser: Is the Minister aware that of the so-called damaged sets, not one valve was damaged or had been removed? They were 22 valve sets. Further, is the Minister aware that there was a large number of rotary converters which have been sold at a large profit to industry in Lancashire, and that of the sets so dumped there were 8,000 complete sets which were sold at an average price of £8 or £10 a set? Is not this an extremely incompetent way of managing the country's business?

Mr. Strauss: I cannot accept all these facts. All I know is that there was no new apparatus of any sort put in this shaft, that all the second-hand apparatus which was put there was found to be absolutely unsaleable, and the space where these sets previously were housed was urgently needed for other purposes.

Air-Commodore Harvey: Why were these sets not put up for sale or tender in the first place, to give somebody a chance to make the profit, which apparently has been done since?

Mr. Strauss: They were found to be completely unsaleable.

Mr. Peter Thorneycroft: In view of the very serious allegations in this case, will the Minister give an undertaking to have a full public inquiry into the matter to ascertain the true facts so that the people responsible can be brought to book?

Mr. Strauss: No, Sir. I do not consider anybody is responsible for any negligence. This was about three years ago. Most careful inquiries were made to see whether this apparatus was saleable or serviceable in any way. It was

only after the most careful consideration that it was found that it was not saleable and that the best thing to do was to dump it.

Mr. Vane: Rather than sell machine tools to Poles, will the right hon. Gentleman follow this precedent and put them into a pit?

Mr. Fraser: Is the Minister aware that his Ministry, or the Ministry of Fuel and Power, attempted to stop the extraction of this equipment, although the rights had been purchased by a man in that Division? Is the right hon. Gentleman aware that this was an effort by the Ministry to hush up what is nothing less than a major scandal? I have seen the sets, the valves and the rotary converters. They were new and undamaged, and they were of considerable value.

Mr. Oliver Stanley: In view of this direct conflict of evidence on what obviously is a most serious allegation, will not the Minister consider referring this matter to some form of public inquiry?

Mr. Strauss: No, Sir. If the hon. Member who raised the Question has some information contrary to that which I have given to the House——

Mr. Stanley: He has given it.

Mr. Strauss: —information which is supported by some evidence, I shall be very willing to look into the evidence and answer a further Question on the matter, if necessary.

Mr. Fraser: In view of the utterly unsatisfactory nature of the reply, I wish to give notice that I shall raise this matter on the Adjournment, and I shall bring some of the machinery to the House to show to the right hon. Gentleman.

Mr. H. Fraser: asked the Minister of Supply how many sets of radio equipment and of what type have been buried in the Delphouse pit near Cheadle, Staffordshire; and whether, in view of the profitable recovery of sets from the Wonder pit nearby, he will concert with the Minister of Fuel and Power for their extraction.

Mr. G. R. Strauss: About 1,300 radio transmitters and transmitter receivers


were dumped in the Delphouse pit, and 30,000 incendiary bombs were dumped on top of them. It would, therefore, be impracticable to recover the sets, which could not in any case be used for civilian purposes.

Sir Wavell Wakefield: Was the wireless trade given any opportunity to purchase these sets before they were dumped, in order to secure the component parts which are in such short supply and so urgently needed in this country and for export?

Mr. Strauss: These sets, and certainly the sets mentioned in the previous Question, were offered to the trade but they were unsaleable. These sets were not suitable for civilian use.

Mr. H. Fraser: The right hon. Gentleman said that the sets were offered, but is he aware that tenders were received in this country from Poland, Holland and France, and that they could not be taken because the sets were not put on the market?

Electric Soldering Irons

Colonel J. R. H. Hutchison: asked the Minister of Supply why permission asked for by Bio Electrics, Ltd., to send to the hon. and gallant Member for Central Glasgow the approved specification and drawings of electric soldering irons as laid down by the Co-ordinating Committee on Hand Tools has not been granted, although asked for in July last.

Mr. G. R. Strauss: This specification was a draft which was circulated to manufacturers for their comments. It was subsequently withdrawn for reconsideration and finally abandoned. While permission to send a copy to the hon. and gallant Member was not specifically refused, it was assumed that the firm would not, in these circumstances, wish to do so. If, however, he would like a copy of the draft, I shall be glad to send him one.

Colonel Hutchison: Is the specification which replaced the one that was withdrawn available for the use of Members, if they want it?

Mr. Strauss: If there is a specification which has replaced the one which has been withdrawn, I will certainly send one to the hon. and gallant Member, if he so desires.

Steel Companies (New Capital)

Mr. Erroll: asked the Minister of Supply in what way a steel company may now finance an urgent approved project for which a public issue of new capital would have been made.

Mr. G. R. Strauss: All the normal ways of raising new capital are still open to a steel company. The British Iron and Steel Corporation will be liable for all debts to banks or other creditors of those companies whose shares it will acquire, and subscribers to new issues of securities will receive compensation equal to the price of issue.

Mr. Erroll: Does the Minister think that it is very likely the public will subscribe to those new issues?

Imported Monkeys

Mrs. Leah Manning: asked the Minister of Supply whether he is aware that 250 monkeys recently arrived in this country from Calcutta by air consigned to his Department; and for what purpose he intends to use these animals.

Mr. G. R. Strauss: The animals referred to are required for research purposes, the nature of which it would not be in the public interest to disclose.

Mrs. Manning: In view of the extreme reticence of the Minister of Supply, like that of his right hon. Friend the First Lord of the Admiralty, may I ask whether he is aware that this reticence only leads to the view among the general public that these animals are needed for some nefarious purpose? If it is, in fact, proved that they are needed for the same reasons as the animals were needed at the Bikini trials, the conscience of this country will be as revolted as it was at that time.

Sir W. Smithers: In view of the shortage of Labour candidates, is it a fact that safe seats have been found for all these monkeys?

Mr. Emrys Hughes: Are these animals being brought here for experiments in bacteriological warfare?

Iron and Steel Orders (Breaches)

Commander Noble: asked the Minister of Supply how many offers con stituting breaches of the Iron and Steel


Orders have been investigated by his price investigations office since 1st January, 1946; on how many occasions were proceedings instituted; and how many convictions were obtained.

Mr. G. R. Strauss: Eleven offers to sell iron and steel above controlled prices have been investigated, and it has been decided not to prosecute. Nine cases are still under investigation, and I cannot say yet whether or not proceedings will be instituted.

Commander Noble: Can the Minister say why it has been decided not to prosecute?

Mr. Strauss: Because it was considered that the evidence was not strong enough to obtain a conviction.

Steel Companies (Subsidiaries)

Mr. Enroll: asked the Minister of Supply (1) if he will publish a list of all the subsidiary companies in

WHOLLY-OWNED SUBSIDIARIES OF COMPANIES LISTED IN THE THIRD SCHEDULE OF THE IRON AND STEEL BILL


(a) Registered in the United Kingdom


Third Schedule Company
Wholly-owned Subsidiary


Arthur Lee &amp; Sons Ltd.
Security Steel Strappings Ltd.



Lee of Sheffield Ltd.


The Briton Ferry Steel Co. Ltd.
Briton Ferry Steel &amp; Tinplate Agency Ltd.


Brown Bay ley's Steel Works Ltd.
Stainless and Rustless Steel Co. Ltd.


Burnell &amp; Co. Ltd.
Widmet Ltd.



Birmingham Corrugated Iron Co. Ltd.


The Bynea Steel Works Ltd.
St. David's Tinplate Co. (1927) Ltd.


Cargo Fleet Iron Co. Ltd.
South Bank Basic Slag Co. Ltd.



South Bank Chemical Co. Ltd.



Ormesby Rolling Mills Ltd.


Colvilles Ltd.
Clyde Alloy Steel Co. Ltd.



Archibald Russell Ltd.



Fullwood Foundry Co. Ltd.



Carnlough Lime Co. Ltd.



Colville Constructional Co. Ltd.



Polmaise Patent Fuel Co. Ltd.


Darwen and Mostyn Iron Co. Ltd.
Darwen Realisation Co. Ltd.


Dorman, Long &amp; Co. Ltd.
Tees Side Bridge &amp; Engineering Works Ltd.



Industrial Housing Association (No. 4) Ltd.



Dorman Long Holdings Trust Ltd.



Bowesfield Steel Co. Ltd.


English Steel Corporation Ltd.
Industrial Steels Ltd.


Guest, Keen and Nettlefolds Ltd.
Nettlefolds Ltd.



Nettlefold-Stenman Hinges Ltd.



John Garrington &amp; Sons Ltd.



United Wireworks (Birmingham) Ltd.



"Twisteel" Reinforcement Ltd.



Butler Spragg &amp; Co. Ltd.



British Screw Co. Ltd.



Thos. Haddon &amp; Stokes Ltd.



Nettlefold &amp; Sons Ltd.



Henry Cox Screw Co. Ltd.



Guest, Keen &amp; Nettlefolds (Midlands) Ltd.



David Powis &amp; Sons Ltd.



Geo. Goodman Ltd.

the United Kingdom owned by each of the companies listed in the Third Schedule to the Iron and Steel Bill;

(2) if he will publish a list of the subsidiary companies in overseas countries owned by each of the companies listed in the Third Schedule to the Iron and Steel Bill.

Mr. G. R. Strauss: With the hon. Member's permission, I will circulate in the OFFICIAL REPORT lists of the subsidiaries in the United Kingdom and overseas which, according to my present information, are wholly owned by companies named in the Third Schedule to the Iron and Steel Bill.

Mr. Erroll: Can the Minister say roughly how many of these companies there are?

Mr. Strauss: I think the number is about 150.

Following are the lists:

Third Schedule Company
Wholly-owned Subsidiary


Guest, Keen Baldwins Iron &amp; Steel Co. Ltd.
Briton Ferry Works Ltd.



Dowlais Collieries Ltd.



Cribbwr Fawr Collieries Ltd.


Hadfields Ltd.
Hadfields Foundry &amp; Engineering Co. Ltd.



Hadfields Forgings Ltd.



Millspaugh Ltd.



Hargreaves and Jennings Ltd.



The Manganese Steel Co. Ltd.



Rayboulds Ltd.


J. J. Habershon &amp; Sons Ltd.
W. T. Beesley &amp; Co. Ltd.



Edmonton Steel Strip Co. Ltd.


John Baker &amp; Bessemer Ltd.
Harrison and Camm Ltd.


John Lysaght Ltd.
John Lysaght's Bristol Works Ltd.



Uskside Engineering Co. Ltd.



*Lysaght's (Exports) Ltd.


John Summers &amp; Sons Ltd.
Buckley Brick &amp; Tile Co. Ltd.



Buckley Colliery Co. Ltd.



Castle Fire Brick Co. Ltd.



*Export Agency Co. Ltd.


The Lancashire Steel Corporation Ltd.
Rylands Brothers Ltd.



Whitecross Co. Ltd.



Pearson &amp; Knowles Engineering Co. Ltd.



Penfold Fencing &amp; Engineering Ltd.


The Millom &amp; Askam Hematite Iron Co. Ltd.
*Alquife Mines &amp; Railway Co. Ltd.


The New Cransley Iron and Steel Co. Ltd.
Denford Quarries Ltd.



Excelsior Limestone Co. Ltd.


Partridge Jones &amp; John Paton Ltd.
Crumlin Valley Collieries Ltd.



Tir Pentwys "Black Vein" Steam Coal &amp; Coke Co. Ltd.


Richard Johnson &amp; Nephew Ltd.
Johnson &amp; Nephew Box Strapping Co. Ltd.



Johnson &amp; Nephew Fence Co. Ltd.



Strappings Ltd.



Strappings (Overseas) Ltd.


Richard Thomas &amp; Baldwins Ltd.
Clayton Tinplate Co. Ltd.



Margam Co-op. Homes Ltd.



H. F. Spencer and Co. Ltd.



S. J. Burrell Prior Ltd.



Swansea Navigation Collieries Ltd.



South Wales Tinplate Corporation Ltd.


The Santon Mining Co. Ltd.
Nostell Colliery Co. Ltd.


The Sheepbridge Co. Ltd.
Sheepbridge Stokes Centrifugal Castings Co. Ltd.



The Dunston Iron Co. Ltd.



Sheepbridge Engineering Co. Ltd.



Sheepbridge Stokes Engine Liners Ltd.



Sintered Products Ltd.



Automotive Engineering Co. Ltd.


Shelton Iron, Steel &amp; Coal Co. Ltd.
Holditch Mines Ltd.



Coking Co. Ltd.



New Acid Co. Ltd.



Staffordshire Chemical Co. (1917) Ltd.


Smith &amp; McLean Ltd.
The Galvanized Steel Co. Ltd.


The Stanton Ironworks Co. Ltd.
Holwell Iron Co. Ltd.



Stanton Housing Co. Ltd.



Cochranes (Middlesboro') Foundry Ltd.


The Staveley Coal &amp; Iron Co. Ltd.
Burton Ironstone Co. Ltd.



Arkwright Coal Co. Ltd.



Bradley &amp; Foster Ltd.



British Soda Co. Ltd.



Arblaster &amp; Co. Ltd.



Bradleys (Concrete) Ltd.



Ernest Graham &amp; Co. Ltd.



Beswicks Limeworks Ltd.



Staveley Estates Ltd.



Birmingham Chemical Co. Ltd.


Stewarts &amp; Lloyds Ltd.
Lloyds Ironstone Co. Ltd.



Islip Iron Co. Ltd.



Lloyd &amp; Lloyd Ltd.



Bromford Tube Co. Ltd.



Clydeside Tube Co. Ltd.



John Russell &amp; Co. Ltd.



John Spencer Ltd.



Prothero Steel Tube Co. Ltd.


*These Companies are understood to be operating overseas.

Third Schedule Company
Wholly-owned Subsidiary


Stewarts &amp; Lloyds Ltd.
James Russell &amp; Sons Ltd.



The Scottish Tube Co. Ltd.



"Unit" Superheater &amp; Pipe Co. Ltd.



Corby (Northants) &amp; District Water Co. Ltd.



Tubewrights Ltd.



Bowne &amp; Shaw Ltd.



Stewarts &amp; Lloyds &amp; Stanton Wagons Ltd.


Thos. Firth &amp; John Brown Ltd.
F. B. Engineers Ltd.


The United Steel Companies Ltd.
North Lincolnshire Iron Co. Ltd.



Yorkshire Engine Co. Ltd.



Rother Vale Collieries Ltd.



United Coke &amp; Chemicals Ltd.



Moresby Coal Co. Ltd.



Risehow Colliery, Coking and By-Products Co. Ltd.



Distington Engineering Co. Ltd.



Cumberland Storing Co. Ltd.



Kiveton Park Coal Co. Ltd.



J. &amp; G. Wells Ltd.



Sheffield Coal Co. Ltd.



Shireoaks Colliery Co. Ltd.



Steel, Peech &amp; Tozer Ltd.



Workington Iron &amp; Steel Co. Ltd.


The Whitehead Iron and Steel Co. Ltd.
W. A. Baker Ltd.



Whitehead, Hill &amp; Co. Ltd.



Godins (The Rollers of Steel Sections) Ltd.


William Beardmore &amp; Co. Ltd.
Beardmore Overseas Corporation Ltd.



Glasgow Railway Engineering Co. Ltd.


Colvilles Ltd.
Metal-Gas Co. Ltd.


Smith &amp; McLean Ltd.


English Steel Corporation Ltd.
Firth Vickers Stainless Steels Ltd.


Thos. Firth &amp; John Brown Ltd.


The Lancashire Steel Corporation Ltd.
William Robertson Ltd.


Monks, Hall &amp; Co. Ltd.


Guest, Keen and Nettlefolds Ltd.
Joseph Sankey &amp; Sons Ltd.


John Lysaght Ltd.


Stewarts &amp; Lloyds Ltd.
Lancashire and Corby Steel Manufacturing Co. Ltd.


The Lancashire Steel Corporation Ltd.
Lancashire and Corby Steel Selling Co. Ltd.


Guest, Keen Baldwins Iron &amp; Steel Co. Ltd.
Ledloy Ltd.


Guest, Keen and Nettlefolds Ltd.



Wensley Lime Co. Ltd.


South Durham Steel and Iron Co. Ltd.
New Brancepeth Colliery Co. Ltd.


Cargo Fleet Iron Co. Ltd.
Trimdon Coal Co. Ltd.



Wingate Coal Co. Ltd.


Coalvilles Ltd.
British Basic Slag Ltd.


Dorman, Long &amp; Co. Ltd.


John Summers &amp; Sons Ltd.


The Lancashire Steel Corporation Ltd.


The Lilleshall Co. Ltd.


The Park Gate Iron and Steel Co. Ltd.


The Patent Shaft &amp; Axletree Co. Ltd.


Round Oak Steel Works Ltd.


The United Steel Companies Ltd.


Brymbo Steel Works Ltd.


Cargo Fleet Iron Co. Ltd.


Shelton Iron, Steel and Coal Co. Ltd.


The Sheepbridge Co. Ltd.
Newstead Colliery Co. Ltd.


The Staveley Coal &amp; Iron Co. Ltd.

(b) Registered in Overseas Countries


Guest, Keen and Nettlefolds Ltd.
Guest, Keen Williams Ltd.


Hadfields Ltd.
Hadfields (S.A.) Proprietary Ltd.


Richard Thomas &amp; Baldwins Ltd.
Baldwins (South Africa) Ltd.



R.T.B. (Australia) (Proprietary) Ltd.



Canadian Tinplate Co. Ltd.


Stewarts &amp; Lloyds Ltd.
Stewarts &amp; Lloyds of India Ltd.



Stewarts &amp; Lloyds of New Zealand Ltd.

Steel Allocations

Sir W. Wakefield: asked the Minister of Supply what was the amount of the allocation of steel given for the manufacture of Hunslett locomotives ordered by the National Coal Board for underground operation.

Mr. G. R. Strauss: I regret that I cannot disclose details of allocations to particular manufacturers.

Sir W. Wakefield: Is the Minister aware that this steel which is in such short supply is now being wasted; that these locomotives are lying idle; that they cannot be used and they cannot be exported because it is only possible to use them underground in this country? Why does the Minister allocate steel in this way, in view of the shortage in this country and the fact that it is so urgently needed for so many things?

Mr. Strauss: There is a general shortage of steel. Many firms who require steel cannot get all they want.

Sir W. Wakefield: Then why give it for useless projects like this?

Lieut.-Colonel Lipton: asked the Minister of Supply whether, in view of the contribution made by the motor industry to the export trade, he will increase the next allocation of steel.

Mr. G. R. Strauss: I regret that it has not been possible to make more than a very small increase in the allocation of steel to the motor industry for the first period of 1949.

Lieut.-Colonel Lipton: Is my right hon. Friend aware that it is worth while cutting down less essential allocations for the purpose of giving even greater encouragement to an industry which is making such a notable contribution to our export drive?

Mr. Strauss: The difficulty is to find those less essential products in which we could effect an economy.

Factory, Distington

Mr. Peart: asked the Minister of Supply if he has any statement to make on the future of High Duty Alloys Ltd. factory, Distington, Cumberland.

Mr. G. R. Strauss: This privately-owned factory was extended and additional plant installed during the war at

Government expense. The extension and part of the plant have now been sold to the owners, High Duty Alloys, Ltd. My information is that only part of the factory will be needed for aluminium fabrication, owing to the reduced civilian demand, and the remainder will be let for other manufacturing purposes, if a suitable tenant can be found.

Mr. Peart: Is my right hon. Friend aware that the paying off of skilled workers recently is causing concern in that area and would he be prepared to conduct a local inquiry as to the future of the factory?

Mr. Strauss: I am aware of what my hon. Friend says, but High Duty Alloys, Ltd., have a right of option on the building and, although they will consult us as to how it will be used, we have no authority to intervene.

Agricultural Tools

Mr. Skeffington-Lodge: asked the Minister of Supply whether he will make a statement about the shortage of sugar-beet forks; and where this exists, what steps are being taken to alleviate it.

Mr. George Jeger: asked the Minister of Supply whether he is aware of the shortage of fully-strapped garden forks; and whether he will get more of these made.

Mr. David Renton: asked the Minister of Supply whether he is aware of the present shortage of spades, forks, beet forks, and potato forks; and what steps are being taken to overcome the shortage.

Mr. G. R. Strauss: I am not aware of any general shortage of these tools. Supplies of sugar-beet forks for the present season will not be less than were available last season. There may, however, be seasonal shortages locally of all types of spades and forks. If the hon. Members have evidence of a shortage in a particular area and will let me have details, I will draw the manufacturers' attention to it.

Motor Show (U.S.A.)

Mr. John E. Haire: asked the Minister of Supply if, in order to increase sales of British cars in the United States, he will consult with the motor trade with


a view to transporting the recent motor show to America for exhibition in the leading cities.

Mr. G. R. Strauss: Yes, Sir; but preliminary inquiries suggest that this is unlikely to be practicable.

Mr. Haire: Does not my right hon. Friend still retain considerable influence with the motor industry and will he not encourage them to see that very considerable free publicity would result from such an expedition to the leading States of America, quite apart from the fact that there would be no difficulty in selling the cars at the show?

Mr. Strauss: That is being considered by the motor industry, but there are very real difficulties and I am doubtful if, at the end, it will be found possible to do this.

Mr. Haire: Will my right hon. Friend say what are some of the difficulties?

Mr. Strauss: The difficulty of obtaining an appropriate hall, the difficulty of expenditure—which is a particular difficulty—and there are many others.

Air-Commodore Harvey: If one of the difficulties is that of shipping, will the right hon. Gentleman see whether he can get an aircraft carrier to take the whole show over?

Oral Answers to Questions — MINISTRY OF WORKS

W.L.A. Hostel, Wiltshire

Mr. R. S. Hudson: asked the Minister of Works when work on the Women's Land Army Hostel, near Rams-bury Aerodrome, Wiltshire, was started; what was the original date of completion; when it is now hoped to finish it; what was the original estimate of cost; what is now expected to be the final cost; and how many men have on the average been employed.

The Minister of Works (Mr. Key): Work on the preparation of the Women's Land Army Hostel, near Ramsbury Aerodrome, Wiltshire, was started on 17th March, 1948, and it was originally hoped to finish it in May. The work was completed on 11th August. The original estimate of cost was £1,330; the expected final cost is £2,603; the average number of men employed was 10.

Zone Conferences (Press)

Mr. De la Bère: asked the Minister of Works why representatives of the Press are debarred from attending and reporting zonal conferences; and if he will now remove this disability.

Mr. Key: Zone conferences are in no sense public meetings. The Press do not attend inter-Departmental meetings held for the transaction of official business and these meetings are of the same type. I see no reason to change the practice.

Mr. De la Bère: Do not these conferences bring out many of the reasons for the almost unbelievable slowness in building? Surely the public has a right to know what these reasons are? Surely the whole object is defeated if the conferences are kept secret?

Mr. Key: The purpose of these zone conferences is to consider the allocation between the various local authorities concerned of the available building labour and materials in the area. This sort of discussion could not adequately and properly be carried out in public.

Mr. De la Bère: In view of the thoroughly unsatisfactory nature of the reply, I shall raise the matter on the Adjournment without further ado.

Slate Quarries, North Wales

Mr. Goronwy Roberts: asked the Minister of Works what has resulted from the meeting in Caernarvon in July, 1948, between representatives of the North Wales slate quarrying industry and officials of his Department.

Mr. Key: The meeting was held to discuss a detailed technical report made at my invitation. This report made recommendations regarding the machinery required by the industry and suggested measures to improve its organisation through the formation of larger units. The former recommendations were welcomed by representatives of the industry, and help is being given and will continue to be given to obtain delivery of equipment. Some of the firms are now considering the formation of a merger company, and I have made it clear that if I receive businesslike proposals, I am prepared to facilitate the raising of new capital.

Taxicabs, New Palace Yard

Sir T. Moore: asked the Minister of Works whether he will consider the erection of a prominent sign outside the gates of New Palace Yard to indicate that a taxicab is required at the Members' entrance, instead of the present ineffective bell.

Mr. Key: I am discussing with the authorities of the House the possibility of making other arrangements.

Sir T. Moore: While I thank the right hon. Gentleman for his reply, may I ask him to bear in mind that at present only those taxicabs coming from the district of Waterloo can hear the bell and that no taxicab coming from Millbank, Victoria or Whitehall can hear it? As a consequence, Members of Parliament are frequently kept waiting a quarter of an hour or twenty minutes for a cab.

Club, Chadderton (Repairs)

Mr. Leslie Hale: asked the Minister of Works (1) whether an official investigation has been made by his Department into the repairs to the Chadderton North Ward Conservative Club and into the circumstances under which a decision was made that proceedings would not be taken; and whether he has any statement to make;
(2) what was the amount of the permit granted to the Chadderton North Ward Conservative Club for repairs and renewals to their property during the year ended 31st March, 1947; and what was the amount actually expended.

Mr. Key: A licence for £90 was granted in November, 1946, and the expenditure on work requiring a licence, in fact, amounted to £186. The discrepancy was investigated by the local authority concerned who undertake proceedings for offences against the building licensing regulations, and they decided not to take proceedings in this instance. I see no reason to override their decision.

Mr. Hale: Is the right hon. Gentleman aware that the members of the local authority concerned were also members of the committee of the Conservative club and that when it was pointed out that it was improper for them to vote on this matter, when it came before the local

authority, they all resigned, temporarily, membership of the Conservative club in order to vote against this prosecution? If these are the facts, does not the Minister consider that the matter should be investigated?

Mr. Key: I was not aware of these facts, but I do riot think they make any difference to the question of this licence. The work done without licence at a cost of £96 consisted of overhauling electric lighting, repairs to the lift and roof, and joinery and plumbing repairs. A licence for this would have been granted if application had been made, in addition to the licence already given.

Mr. Hale: While no one doubts the need for light in a Conservative club at this moment, the same considerations should apply to them as apply to ordinary householders.

Major Gates: Will the Minister emphasise that his Department has investigated this case extremely thoroughly and that some of these alterations were to comply with the law which requires emergency lighting in a club of this sort?

Mr. Key: Of course, my Department investigated it and, as I have said, I see no reason to act contrary to the decision of the local authority in this matter.

General Gordon (Statue)

Mr. Wilson Harris: asked the Minister of Works whether he has yet reached a decision as to the future of the statue of General Gordon.

Mr. Key: Yes, Sir. I propose to put this statue in a public garden which will be laid out between the new Government Offices now being built in Whitehall and the Embankment. This site has been approved in principle by the Royal Fine Art Commission.

Mr. Wilson Harris: While I thank the right hon. Gentleman for his decision—a slightly deferred decision—which I think will give general satisfaction, may I ask him whether the General will be established in time to keep an eye on the development of the Exhibition site across the water?

Mr. Key: We all hope he will.

New House of Commons (Flooring)

Brigadier Rayner: asked the Minister of Works whether he proposes to use Palmerstoni endriana, otherwise known as Australian walnut, as flooring in the new Chamber of the House of Commons.

Mr. Key: The architect proposes to use Australian walnut for the flooring of the new Chamber.

Brigadier Rayner: Is the Minister aware that about every fiftieth plank of this otherwise excellent hard wood develops a most frightful smell, and will he, entirely in the interests of the House, see that every plank is carefully examined before being put in?

Mr. Key: I am certain that those concerned will do so.

Oral Answers to Questions — FALKLAND ISLANDS

Commander Noble: asked the Secretary of State for Foreign Affairs whether he has any further statement to make on the Falkland Islands Dependencies disputes, after his recent conversations with the Argentine Foreign Minister.

The Minister of State (Mr. McNeil): In the course of a friendly discussion with the Argentine Foreign Minister, my right hon. Friend explained the attitude of His Majesty's Government towards the initiative of the United States Government as outlined in a reply given to the hon. Member for Hornsey (Mr. Gammans) on 3rd November. While the possibility of a general settlement of the Antarctic issue is under discussion, it is my understanding that both Governments will endeavour to avoid incidents in the Antarctic which would interfere with their friendly relations.

Mr. Drayson: Is the Secretary of State aware that the Argentine Republic have published a stamp issue in which they show all land in the Antarctic between 74 degrees and 25 degrees longitude as Argentine possessions, and as that includes the Falkland Islands, will he ask the Argentine to withdraw this issue of stamps until the matter has been investigated?

Mr. Speaker: The Question refers, I think, to the conversations with the Argentine Minister. It does not refer to this aspect.

Oral Answers to Questions — FRANCE (DETAINED BRITISH SUBJECTS)

Commander Noble: asked the Secretary of State for Foreign Affairs whether he will make representations to the French Government requesting them to expedite the trial or release on bail the four British subjects detained at Dieppe since 1st July and charged with smuggling; and whether he will make a statement.

Mr. McNeil: Since the answer is rather long I will, with permission, circulate it in the OFFICIAL REPORT.

Commander Noble: Is the Minister aware that these men are complaining of the cold, the food, the lack of clothing and of writing materials, and will he state in his reply the limiting factor which is preventing them being granted bail?

Mr. McNeil: I am aware that the conditions are not altogether satisfactory and we are making representations. I have referred in my reply to the limiting factor affecting bail, which has been offered to only one man. The French think that the accusations are so serious that the men would not normally be offered bail.

Following is the answer:

Reports on this matter have been received from His Majesty's consular officers at Paris and Rouen and the latter has been in close touch with the Dieppe judicial authorities since the beginning of the case. The four men under detention are legally represented and while there are, as the hon. and gallant Member is no doubt aware, considerable differences between the judicial procedure of France and this country, they are receiving the same treatment as would be granted to French citizens under similar circumstances, except as regards bail, which the French authorities are most reluctant to allow in cases of aliens charged with smuggling offences. They are, however, prepared to release one of the men, Mr. C. J. Clark, on a recognizance of 200,000 francs. As regards the other three British subjects, an


appeal against the Judge's refusal to allow bail has unfortunately been dismissed.

One of the principal reasons for the delay in the hearing of this case is that the French Court requires the evidence of certain persons resident in this country. A Letter of Request for the examination of these witnesses was not received until 15th September; this document did not contain sufficient details to enable the witnesses to be identified and, as a result, their addresses have only recently been ascertained. This aspect of the case will be dealt with as quickly as possible.

My right hon. Friend is very conscious of the concern that is naturally felt at the prolonged detention of these British subjects; instructions are being sent to His Majesty's Embassy in Paris to take whatever steps they may think appropriate to hasten the trial of these men.

Oral Answers to Questions — BRITISH HONDURAS (GUATEMALAN CLAIM)

Mr. Gammans: asked the Secretary of State for Foreign Affairs if he will make a further statement on the claim by Guatemala to territory in British Honduras.

Mr. McNeil: I am afraid that in spite of every effort by His Majesty's Government, we are no nearer to a settlement of this dispute. The controversy involves a legal claim which the Guatemalan Government have themselves put forward as such. His Majesty's Government, therefore, take the line that the first thing that must be done is to have this claim settled by means of a decision by the International Court of Justice. For this purpose they empowered that Court, over two and a half years ago, to deal with any claims concerning British Honduras. Unfortunately, however, the Guatemalan Government state that they are not prepared to agree to the Hague Court adjudicating the case on its legal merits. Instead, they recently suggested mediation by the United States Government. His Majesty's Government would be prepared to accept mediation in suitable cases, but in the present instance, as the claim against them is a purely legal one, they must insist on the legal issue being properly determined.

Mr. Gammans: Have the Government made it perfectly clear that they repudiate in toto this impudent claim?

Mr. McNeil: The Government have made it perfectly plain that this is a legal claim which it is appropriate should be submitted to the International Court.

Oral Answers to Questions — GERMANY

Refugee Association, Hanover

Mr. Skeffington-Lodge: asked the Secretary of State for Foreign Affairs on what grounds he has given permission for the establishment at Hanover of an association of Germans from each department of what was previously Eastern Germany; and how were the representatives of the areas concerned chosen to serve on the body set up.

Mr. McNeil: The association to which my hon. Friend refers appears to be concerned principally with the problem of representing the interests of German refugees now in Western Germany, but previously resident in the former German territories. A meeting of this organisation was held at Hanover on 6th November which was attended by delegates chosen by the refugees themselves.
The responsibility for the licensing and control of all German refugee associations in the British zone was handed over to the Land Governments in June, 1948, subject to the over-riding power of the Military Governor to intervene should the association indulge in political agitation.

Mr. Skeffington-Lodge: Does my right hon. Friend not think it the height of unwisdom to allow an organisation like this to be established, in view of the fact that it is almost entirely nationalistically inspired, and that the personnel comprising it are people who, all along down the years, have been associated with the nationalist and Nazi movements in Germany?

Mr. John Hynd: Before my right hon. Friend replies, may I ask him if it is not time now to recognise that these people have already suffered sufficiently, and at least should be permitted to be able to represent their views?

Mr. McNeil: I think it proper and just that their proper interests should still be safeguarded. If my hon. Friend has


any evidence of political agitation, my right hon. Friend, of course, will be more than glad to examine it.

Mr. Bramall: Will my right hon. Friend bear in mind the sharp distinction between those people representing their very real grievances and wishing to consider their own problems inside Germany as it is today, and those who wish to carry on revisionist propaganda which, as I understand it, is the object of many of these associations?

Mr. McNeil: It is precisely the evidence of that type of propaganda that I am anxious to examine.

Ruhr Industries (Trusteeship Scheme)

Mr. Warbey: asked the Secretary of State for Foreign Affairs what answer he has returned to protests from the French and other Allied Governments against the Anglo-American Military Government ordinance concerning the future of the Ruhr coal, iron and steel industries.

Mr. McNeil: As the answer is long I will, with permission, make a statement at the end of Questions.

Later—

Mr. McNeil: It is not proposed to make public the communications exchanged between His Majesty's Government and the French Government on this subject. I should like, however, to take this opportunity to make a statement about the Trusteeship Scheme for the German coal and iron and steel industry. No protest about this pronouncement has been received, except from the French Government. When the Anglo-United States proposals were first discussed with the French Military Governor and (in accordance with the practice followed since the London Talks on Germany earlier this year) with Benelux representatives in Germany, the latter made certain comments which were taken into account in the Law as finally drafted.
As for the French Government, I must make the nature of their protest clear. It relates only to the statement in the preamble to the Trusteeship Laws that "the question of the eventual ownership of the coal and iron and steel industries is one for determination by a freely elected German Government." They do not take

exception to the Trusteeship Laws as such. On the contrary, they favour the reorganisation scheme in principle as tending to increase production.
The question at issue, therefore, is that of future ownership. The French Government have consistently maintained that security could best be achieved by subjecting the Ruhr to some form of international ownership; and, when they notified His Majesty's Government of their acceptance of the London decisions, they stated that they continued to regard international ownership as the best solution. His Majesty's Government, on the other hand, remained convinced that some form of public ownership is the right solution of the problem. But the question of eventual ownership is one which could not he longer left in suspense if the resources of the German industries concerned are to be mobilised effectively in the task of European recovery to which the three governments are committed. The two Governments responsible for the administration of the Bizone were both of the opinion that, in effecting the needed reorganisation of the coal and iron and steel industries centred in the Ruhr on a temporary and provisional basis, it was essential to set at rest the uncertainties about eventual ownership which were impeding full production. A statement that the question of ownership would be left to the determination of a freely-elected German Government which, in the circumstances, seems to His Majesty's Government the solution most compatible with our conception of democracy, was therefore included in the draft of the reorganisation scheme as submitted to the French Military Governor some two months ago. It was to this passage that General Koenig took exception and his representations were supported later by formal representations from the French Ambassador.
These French objections were given careful consideration. It was evident that French views and our own on the question of ownership could not be reconciled, and that the good effects which we expected from the promulgation of the trusteeship laws could not be achieved if the question of ownership was once again left in the air. My right hon. Friend accordingly notified the French Government on 4th November, after full consultation with the United States,


authorities, that he felt unable to instruct the British Military Governor to modify the proposal which he had agreed with his United States colleague for the inclusion in the Trusteeship Law of the statement about eventual ownership.
I have dealt with the past history of this matter in order to dispel any misapprehension that we failed to keep the French Government informed or treated them with less consideration than is proper between friends and allies. But in basic objectives His Majesty's Government and the French Government are at one. We are both aiming at arrangements for the control and level of German industry, which will give security to France, to this country and to our neighbours. We are, I believe, at one also in wishing to see the productive resources of Western Germany peacefully employed for the economic recovery of Europe.
So far as ownership is concerned, however, His Majesty's Government believe it right that a freely elected German Government reflecting the will of the German people should make its own choice. But that does not mean that they can choose to restore excessive concentrations of economic power or to reinstate persons who furthered the aggressive designs of the Nazi party. These points are specifically covered in the Trusteeship Law. Neither can they make arrangements about ownership which frustrate the exercise of the powers which will be reserved to the Occupying Authorities in the Occupation Statute now in preparation, or are in conflict with present or future security controls or with the terms of an eventual Peace Treaty. As the public statement accompanying the promulgation of the law made clear, the German Government must exercise its choice "within the limits of Military Government policy already expressed." I hope that it will be possible, when current discussions on an International Authority for the Ruhr and on the Occupation Statute are completed, to make a further statement explaining the various steps in different fields—of which ownership is only one—which will be taken to ensure that the gradual devolution of authority from Military Government to German hands will be carried out in a manner which safeguards

our security and that of our Allies in Western Europe.

Mr. Warbey: In view of certain disturbing signs of a revival of nationalism and militarism in some parts of Germany, will my right hon. Friend pay rather more careful attention to the objections of the French and other Allied Governments who do not desire that the sole ownership and control of the Ruhr mines and steel works shall revert to a German State?

Mr. McNeil: I have tried to make plain that the question of ownership is, subject to certain limitations, in our opinion a matter for the German people. As to the long-term aspects of security, that is surely a subject for the makers of the Peace Treaty and does not arise in connection with a discussion to which my hon. Friend has drawn my attention.

Mr. Eden: I wish to ask the right hon. Gentleman two questions. Am I right in saying that the question of the future ownership of this area and these mines was specifically reserved by agreement at the last Allied meeting which took place in the summer? If so, is it also true that this Anglo-American notification was then made without any further discussion between the Governments between last summer and the issue of the statement?

Mr. McNeil: I think it is hardly accurate to say that it was, reserved. It was not included, but it is true that the French Government particularly drew our attention to their precise reservations on this subject. I am sure the right hon. Gentleman will agree that as joint administrators of the bizone we had certain responsibilities in relation to the organisation of this industry and our own administration. It was in consequence of this responsibility that we took the decision which has now been published.

Mr. Eden: I am sorry to press the right hon. Gentleman, but would he not agree that if this subject was reserved as between Allies as a result of a declaration by one Ally, we should have discussed the matter further with them and at length before issuing a declaration with only one of our Allies?

Mr. McNeil: I quite understand and appreciate the right hon. Gentleman's


care on this subject, but it is hardly accurate to say that it was reserved because one of our allies, for good and understandable reasons, entered their reservations. We had a responsibility from which we could not escape by their reservations.

Mr. H. Hynd: Can my right hon. Friend say who the new trustees will be, and whether their appointment will in any way prejudice the eventual nationalisation or internationalisation of the Ruhr industries?

Mr. McNeil: The subjects are quite separate, as I have already explained. The question of the form of ownership is a matter for the German people.

Mr. H. Hynd: Who will the trustees be?

Patents (Registration)

Mr. Hugh Fraser: asked the Secretary of State for Foreign Affairs whether he is satisfied with the present arrangements for the registering of patents by Germans, and for the safeguarding of these patents internationally, including mutual respect for those registered in the Eastern and Western zones; and what further steps he proposes to take in the matter.

Mr. McNeil: No, Sir, but they are the best we have as yet been able to achieve. The German authorities concerned are taking administrative steps to convert as soon as possible the present patent filing office into a functional office for which we, in conjunction with the United States Government, are seeking international recognition.

Mr. H. Fraser: Is the right hon. Gentleman fully aware of the present handicap this is to German recovery, in that no one can bring forward an invention of any sort without the fear of its not being properly safeguarded? Is this not something which ought to be very energetically pursued.

Mr. McNeil: I am aware of these difficulties, and we are making such provision as we can, and we will join in seeking to have these patents internationally recognised.

Oral Answers to Questions — JAPAN (BRITISH SUBJECTS, COMPENSATION)

Mr. George Jeger: asked the Secretary of State for Foreign Affairs what progress is being made in the negotiations with the Japanese Government for compensation to British subjects who suffered imprisonment and the loss of their household and personal property under Japanese occupation.

Mr. McNeil: This is not a subject for negotiation with the Japanese Government, and consequently no such negotiations are in progress or in prospect. It will be for the Peace Conference to decide whether an obligation is to be imposed on the Japanese Government to meet individual claims in respect of loss or damage to property or for personal injury.

Mr. Walter Fletcher: Does not the question link up with that of the amount of reparations we are to get out of Japan to help those British subjects?

Mr. McNeil: I am asked whether the negotiations are taking place for the apportionment of reparations or indemnity in respect of those claims. My reply must be that that is a matter for the Peace Treaty.

Oral Answers to Questions — UNITED NATIONS APPEAL FOR CHILDREN

Mr. Francis Noel-Baker: asked the Secretary of State for Foreign Affairs what fresh instructions he has sent to the British Delegation to the United Nations for the forthcoming discussions, by the Third Committee of the General Assembly, on the United Nations Appeal for Children.

Mr. McNeil: My hon. Friend is, I am sure, aware that there is considerable support in the Assembly for the view that the Appeal ought to be terminated, on the grounds that the high administrative costs involved have not been proportionate to the success of the Appeal. However, the United Kingdom Delegation to the United Nations General Assembly are instructed to support the


continuation by the United Nations Secretariat of reasonable administrative arrangements to facilitate the holding of further United Nations Appeals.

Mr. F. Noel-Baker: While thanking my right hon. Friend for that reply, may I ask whether he can assure the House that the instructions given to the Delegation will permit a reasonable budget for the co-ordinating part of the Secretariat to carry on these appeals, and that they will be able to do effective work in the future?

Mr. McNeil: I have looked at the business myself, and if a Scotsman may be thought to be reasonable in his attitude to finance, I would say that our instructions are reasonable.

Mr. John Hynd: asked the Secretary of State for Foreign Affairs whether His Majesty's Government will support at the General Assembly of U.N.O. the proposal for a further appeal in 1949 through the United Nations Appeal for Children, and ensure that sufficient funds are allocated to meet the expenses of such appeal; and what steps are being taken in the meantime to maintain the necessary organisation in this country against the possibility of its being required for the further appeal.

Mr. McNeil: As regards the first part of the Question, I would refer my hon. Friend to the reply given today to my hon. Friend the Member for Brentford and Chiswick (Mr. F. Noel-Baker). As to the second part, the official closing date for this appeal was originally fixed for 17th July, but as some payments had still to be received the life of the organisation was prolonged until 31st December, 1948. After that date four trustees will be appointed to deal with any residual funds. If the United Nations Assembly decides in favour of another appeal, the question of new or continuing machinery in this country will naturally have to be considered by those principally concerned, including, of course, the voluntary societies.

Mr. Hynd: Is the Minister aware that. because of the restrictions the British Government are attempting to impose on the administrative expenses in any further appeal, the impression has been created that they are not enthusiastic about a further appeal; is he further aware that

the total administrative costs last year were only a fraction of 1 per cent. of the results, and that it is now suggested those costs should be cut by one-fifth; and will he see that that impression is removed by not sticking too rigidly to the very low sum that is being proposed?

Mr. McNeil: His Majesty's Government must, of course, take proper account of the rising budget costs of the United Nations, and we had to consider whether the sum voted for this particular purpose was proportionate to the results. Submissions have been made by various Members—including my hon. Friend—and the Government have attempted to take account of those opinions. We will see that an adequate but not an extravagant sum—which I do insist the sum last year was—will be made available for this purpose, so far as it lies within the power of the Delegation from this Government.

Mr. Warbey: Would my right hon. Friend say what he would regard as an adequate administrative budget for an organisation which is making a worldwide appeal affecting hundreds of millions of people? For example, would he regard £12,000 as an adequate sum for such a purpose?

Mr. McNeil: No, I should have thought that was on the low side.

Oral Answers to Questions — BRUSSELS TREATY

Mr. Warbey: asked the Prime Minister whether the official statement issued by him on 22nd October, 1948, that the association of the United Kingdom with other Western European nations under the Brussels Treaty is a regional association within the terms of the United Nations Charter refers to Chapter VIII of that Charter which deals with regional arrangements.

The Prime Minister (Mr. Attlee): The Brussels Treaty Organisation is, of course, a regional arrangement but, so far as the maintenance of international peace and security is concerned, it rests on Article 51 of the Charter of the United Nations which ensures the inherent right of collective self-defence.

Mr. Warbey: Since Article 51 does not form part of Chapter VIII of the Charter, and since it is Chapter VIII


which deals specifically with regional arrangements, is it not rather misleading to describe the association as an association within the terms of the Charter?

The Prime Minister: No, I do not think so. I think it is amply covered by Article 51.

Oral Answers to Questions — CHURCH OF ENGLAND (PARSONAGE HOUSES)

Mr. Skeffington-Lodge: asked the Prime Minister whether, in respect of those livings in the Church of England at present in his gift, he will consult with all interested parties with the object of making better use of many of the large parsonage houses attached to them.

The Prime Minister: It has been the practice for many years past in dealing with parsonage houses in Crown livings which fall within the sphere of the First Lord of the Treasury to facilitate the policy of disposal or modernisation in cases in which they are over-large or otherwise unsuitable, and there is full consultation with the interested parties, namely, the incumbent, the diocesan authorities and the Church Commissioners in these negotiations. At the present moment the problem, which is, of course, of general application to all patrons, is under urgent discussion both by the Church Commissioners and in the Church Assembly.

Oral Answers to Questions — ARMAMENTS (SOCIETY OF FRIENDS' LETTER)

Mr. Emrys Hughes: asked the Prime Minister what reply he has made to the letter sent to him from the Society of Friends urging the Government to declare that this country will neither manufacture nor use atomic or bacterial weapons and calling for a drastic cut in armaments.

The Prime Minister: I have taken note of the views expressed in the minute enclosed with the letter, which has been acknowledged. I am not convinced, however, that a declaration of the kind proposed would in fact achieve the purposes desired by the Society of Friends.

Mr. Hughes: Is not the Prime Minister aware that he is losing a splendid opportunity to give moral leadership to the

world? Does he think that by making atomic bombs, and going in for bacterial warfare, we can add to the security of this country?

The Prime Minister: My hon. Friend puts two or three questions in one supplementary question. I have already explained that I do not think that this would be the best way of forwarding the aims of the Society of Friends. I think it is much better that we should seek to arrive at disarmament all round in these matters, rather than by a unilateral declaration, which has not proved effective in the past.

Mr. Austin: Will my right hon. Friend see to it that the enthusiasm of the mititary for these loathsome weapons does not override consideration of the humanities on the part of the Government?

Oral Answers to Questions — AGRICULTURE

Feedingstuffs Allocation

Brigadier Rayner: asked the Minister of Agriculture whether his attention has been drawn to the extent to which holdings are being advertised for sale with feedingstuffs allocation; and whether he will investigate remedies for this abuse of the allocation system.

The Joint Parliamentary Secretary to the Ministry of Agriculture (Mr. George Brown): I am aware that advertisements of holdings for sale sometimes include reference to the ration allocation for pigs and poultry, but I do not know the extent of this practice. I do not regard it as an abuse of the rationing system, nor as a matter in which I could intervene.

Brigadier Rayner: Does the hon. Gentleman realise that from time to time this leads to the wealthier pig keepers getting feedingstuffs for their pigs at the expense of men who in 1939 did not keep pigs but who have learnt a lot about pig keeping since?

Mr. Brown: The real answer is the introduction of a new scheme to allocate feedingstuffs to pig keepers who did not have a pre-war registration. The more we can widen the scheme the more we can increase feedingstuffs, as we have been doing. I see no other answer to it.

Potash

Mr. Gerald Williams: asked the Minister of Agriculture if he will give an assurance that adequate supplies of potash fertiliser will be available to farmers for the 1949 season.

Mr. G. Brown: I would refer the hon. Member to the reply that I gave to the hon. and gallant Member for East Norfolk (Brigadier Medlicott) on 8th November.

Mr. Williams: Does the Parliamentary Secretary remember that a year ago I drew attention to the possibility of a shortage of potash during the 1948 season, and he assured me that there would be none; but is it not a fact that many farmers had difficulty in getting it this year?

Mr. Brown: I well remember the hon. Gentleman's gloomy prognostications, and the answer is that he is very far out. In the year 1947–48—the crop year—the supplies of potash were 180,000 tons, which was 60,000 tons more than in the previous year.

Fowl Pest

Mr. G. Williams: asked the Minister of Agriculture what are the figures of fowl pest notified to his Department and the number of fowls slaughtered for the last four quarters.

Mr. G. Brown: As the answer contains a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Following is the answer:


Quarter ended
Number of Outbreaks of Fowl Pest
Poultry Slaughtered


31st January, 1948
876
80,843


30th April, 1948
107
16,632


31st July, 1948
54
16,164


31st October, 1948
37
18,811*


* One outbreak, in August, involved the slaughter of over 8,000 birds.

Threshing (Labour Gangs)

Mr. G. Williams: asked the Minister of Agriculture if he is aware that in many districts there is great difficulty in obtaining labour gangs for threshing; that this is causing much delay and inconvenience

to farmers who need their grain for stock-feeding; and if he will take steps to improve the position.

Mr. G. Brown: I am not aware of any widespread difficulty in obtaining labour for threshing. As root lifting progresses, more committee labour will become available for threshing.

Mr. Williams: Will the Parliamentary Secretary consider suggesting to the county committees that they might furnish a list of the names of people suitable to fill these jobs?

Mr. Brown: I do not think that question arises. I have made inquiries in Kent, for example, and I have found very little justification for the suggestion that there is any difficulty about this. There might be a delay of a day or so, but, with one exception, there have been no serious complaints in that county or elsewhere. It is mainly the responsibility of the farmers to get labour gangs for threshing. If the farmers ask for help, we certainly do our best to supply it.

Sewage (Manurial Value)

Sir T. Moore: asked the Minister of Agriculture how much sewage in England and Wales is now utilised for enriching the soil; and if he can give an estimate of the general result to the crops.

Mr. G. Brown: I regret the information sought in the first part of the Question is not available. As to the second part, I am sending the hon. and gallant Member a copy of a recent memorandum by the Agricultural Research Council reporting on investigations extending over eight years into the manurial value of sewage sludge and sludge composts.

Sir T. Moore: Will the hon. Gentleman have consultation—agreeable consultation, no doubt—with his right hon. Friend the Minister of Health, who has promised to inquire into this subject, in order to see what are the fruitful possibilities of this most valuable fertiliser?

Mr. Brown: I think that it might be well if the hon. and gallant Gentleman waited until he had read the memorandum.

M.A.F. Building Components

Commander Maitland: asked the Minister of Agriculture how many M.A.F. agricultural buildings are at present in


course of construction; how many have been completed; how many have been sold and are awaiting delivery; how many have been erected; and if he will make a statement on the success of this scheme.

Mr. G. Brown: I am informed that sales of M.A.F. building components to farmers to the end of October amounted to the equivalent of 1,250 buildings each 60 ft. by 18 ft., and orders awaiting delivery represented a further 300 such buildings. The numbers of buildings completed and under construction are not readily available. Sales are increasing steadily and I am satisfied that the scheme is meeting a long-felt need.

Commander Maitland: Can the hon. Gentleman say why these buildings are so expensive, because, as he is no doubt aware, the general criticism about them in the country is that they cost far too much and compare very unfavourably in price with similar buildings produced by private enterprise?

Hon. Members: Hear, hear.

Mr. Brown: I do not know why hon. Members say "Hear, hear," because the whole point of the scheme is that the production, distribution and everything else about these buildings is done by private enterprise. The answer about price is that we have made inquiries into the complaints, and almost in every case it is the local charges for erection that are high and not so much the charge for the building. If we take like for like—buildings that are alike but made in another way—the prices are not high.

Playing Field, East Haddon

Mr. Mitchison: asked the Minister of Agriculture whether he is aware that more than £400 has been raised in East Haddon for a village war memorial playing field and that the parish council's proposal to use five acres for the purpose has the support of the owner of the land and of all the necessary authorities except the county agricultural executive committee; and whether he will now authorise the release of the land so that the villagers may have somewhere to play cricket and football and the village children somewhere else than the public road to play in.

Mr. G. Brown: This matter is under consideration by the Northampton Agricultural Executive Committee, whose views I am awaiting. I will see that a decision is reached at the earliest possible moment and communicate with my hon. Friend.

Mr. Mitchison: Is my hon. Friend aware that unless some agricultural land is released in or around this village, there will be no playground for the children other than the public road, and the inhabitants will have no playing field?

Mr. Brown: The issue in this case is not whether the land can he acquired for use as playing fields as a long-term matter, because that is agreed; the question is, having regard to the need for food, whether we can let the land go? That is the matter now under consideration, and I will have a word about it with my hon. Friend later.

Sir W. Wakefield: Is it not a fact that a playing field used as this is intended to be used could be very fruitful in the production of food by grazing, and why cannot the Minister deal with it in that way?

Mr. Brown: It is a question of balancing all the considerations, and that is precisely what we are now doing.

Oral Answers to Questions — RIVER ISE (CLEANING)

Mr. Mitchison: asked the Minister of Agriculture whether he is aware that soon after serious flooding in 1947 a scheme was prepared by the River Nene Catchment Board for cleaning out the River Ise above and below Geddington, and that work on the scheme was begun, but discontinued; and whether he will sanction completion of the scheme now or take other immediate steps to get that part of the river cleaned out, so as to obviate the risk of flooding after any extensive rainfall.

Mr. G. Brown: A scheme was approved in 1945—not 1947—and work was put in hand. In September last an extension was approved and this work is now being started. I understand that the catchment board will shortly submit a further scheme to the Department with an application for grant aid. This will be considered as soon as it is received.

Mr. Mitchison: Is my hon. Friend aware that there is some urgency in cleaning this river at this point because otherwise, in the event of excessive rainfall, there will be considerable damage through floods?

Mr. Brown: We are well aware of the urgency of the matter, but I would remind my hon. Friend that there are two schemes, or at least one and an extension of it, and the work has already been put in hand.

Major Legge-Bourke: Can the hon. Gentleman give an assurance that delay in implementing this scheme has not been caused by delay in giving a decision about amalgamation or separation of the two catchment boards, the Nene and the Welland?

Mr. Brown: With regard to the second part of the supplementary question, that is a matter which, I think, is irrelevant to this Question. In the first part of the supplementary question, the hon. Gentleman missed the whole point of my answer. There has been, in fact, no delay. The scheme has been approved and is being carried out.

Oral Answers to Questions — HOUSE OF COMMONS CATERING

Sir W. Smithers: asked the hon. Member for West Walthamstow, as Chairman of the Kitchen Committee, what steps have been or are being taken to put the Refreshment Department on a paying basis.

Mr. McEntee: The Committee has increased its cash turnover from under £30,000 in 1944 to over £100,000 in 1947. It opened some of the dining and refreshment rooms during the Parliamentary Recesses for the sale of food and drinks, for a limited time each day, and this new service returns a profit. It has increased prices to a level comparable to those charged by firms outside which run on a commercial basis. It has effected every reasonable economy in operating the department.
I would again emphasise the fact that no loss is incurred by the department during the period when it is trading. I would like also to refer the hon. Member to my answer to the hon. Member for Tiverton (Mr. Amory) on 30th July last,

and to the answer given by the Financial Secretary to the Treasury to the hon. Member for West Walthamstow on 5th November, 1948.

Sir W. Smithers: Can the hon. Gentleman say why the taxpayer should have added to the burdens already imposed on him by a Socialist Government that of subsidising the food of hon. Members?

Mr. McEntee: The taxpayer pays nothing for the meals of either Members of Parliament or anyone else supplied by the Kitchen Committee. The loss is entirely due to the action of this House in determining that the conditions of the staff should be made better than they were in pre-war days, and that tips, which used to be given by Members and others, should be abolished. But for these costs, which, I imagine, were over £20,000, we are not losing but making a profit.

Mrs. Nichol: Can my hon. Friend tell the House whether this is the first year in which the Kitchen Committee has incurred a loss?

Mr. McEntee: No, the Kitchen Committee has almost invariably incurred a loss. This is the first loss incurred during this Parliament, but I have in my hand a copy of a letter addressed by the Chairman of the Kitchen Committee in 1936 to the then Chancellor of the Exchequer, in which he asked him to take over the full responsibility of paying the staff and providing the equipment or, failing that, providing an annual subvention of £5,000 a year. He points out in that letter that, during the previous eight years, a loss was incurred by the Committee in seven years out of the eight.

Mr. Gammans: The hon. Gentleman admits there is a loss, but would he explain who makes good that loss if it is not the taxpayer?

Mr. McEntee: The people who always pay. The Kitchen Committee has on very many occasions received subventions from the Treasury, and there is no difference this year as against any other year.

Mr. John E. Haire: Is it not a fact that the Kitchen Committee is an all-party committee, and that therefore responsibility rests upon the whole House and not upon any section of the House?

Mr. McEntee: I should like hon. Members to understand that the committee is an all-party committee of this House, having 17 members.

Oral Answers to Questions — FOOD SUPPLIES

Coarse Grains (Queensland Project)

Mr. Thomas Reid: asked the Minister of Food if he will make a statement regarding the progress of the Queensland project for the production of coarse grains and other produce.

The Parliamentary Secretary to the Ministry of Food (Dr. Edith Summer-skill): The responsibility for providing information about the progress of the scheme rests with the Overseas Food Corporation: I have, therefore, passed the hon. Member's inquiry to the Corporation, who are, I understand. communicating with him.

Meat Inspection

Mr. Burden: asked the Minister of Food what advances have been made in recent years in the system of meat inspection.

Dr. Summerskill: Local authorities are responsible for the administration of the system of meat inspection and there has been no change in the law in recent years. My right hon. Friend, however, has the system of meat inspection under review.

Mr. Burden: While thanking my hon. Friend for that reply, may I ask if she is aware that at a conference recently it was stated that there had been no advance in the methods of meat inspection during the past 50 years; that that statement received great publicity; and would my hon. Friend not agree that that statement was a wild exaggeration?

Dr. Summerskill: Yes, I did read the report of that conference, and I agree with my hon. Friend. I should not say it was wild, but it was exaggerated.

Christmas Puddings (Aberdeen)

Mr. Hector Hughes: asked the Minister of Food if he is aware that there is a shortage of currants, raisins and other ingredients required for Christmas puddings in the City of Aberdeen; and if he will increase supplies

in sufficient time to enable Christmas to be celebrated.

Dr. Summerskill: We are buying all the currants and sultanas we can afford in the areas open to us, but the supplies obtainable are not sufficient to meet consumer demand. Aberdeen is no worse served than other parts of the country. The Christmas supplies for housewives. which were released on 10th October, should by now be reaching Aberdeen. if they are not already there.

Press Advertisements

Mr. Douglas Marshall: asked the Minister of Food what will be the cost to the taxpayer of his Department's advertisement carried in the paper entitled "Labour's Cornish Voice, Volume 1," and published in September.

Dr. Summerskill: The cost of the September advertisement in this paper cannot be stated precisely. It is one of a group of 11 local newspapers with a combined circulation of 40,000. The cost of the advertisement in all 11 papers was £9 12s.

Mr. Marshall: Did the hon. Lady state that this is a newspaper?

Dr. Summerskill: Yes, Sir.

Co-operative Societies (Allocations)

Mr. Touche: asked the Minister of Food (1) whether the Association of Wholesale Distributors of Imported Poultry and Rabbits Limited were consulted before the decision was made to grant a special preferential allocation of 10 per cent. of imported poultry and rabbits for Christmas to co-operative societies;
(2) whether, in view of the fact that he has made a special preferential allocation of imported poultry and rabbits for Christmas to co-operative societies on the ground of their increased membership, he will also grant a similar preferential allocation to private meat-traders whose registrations have increased.

Mr. Baker White: asked the Minister of Food what consultations he had with the Association of Wholesale Distributors of Imported Poultry and Rabbits Limited before deciding to grant


a preferential 10 per cent. allocation of imported rabbits and poultry to the co-operative societies for Christmas sale.

Brigadier Peto: asked the Minister of Food whether the Association of Wholesale Distributors of Imported Poultry and Rabbits Limited on the one hand and the Master Bakers' Association on the other were consulted before decisions were reached granting special preferential allocations of increased supplies to co-operative societies to the serious disadvantage of private traders; and whether he will make a statement giving his reasons for making this discrimination.

Mr. A. R. W. Low: asked the Minister of Food for what reason he has decided to grant a preferential allocation of 10 per cent. of imported poultry and rabbits to the co-operative societies for Christmas.

Captain Crowder: asked the Minister of Food why the co-operative societies are to receive a preferential allocation of 10 per cent. of the total imports of poultry and rabbits.

Sir William Darling: asked the Minister of Food (1) if all organisations of wholesale distributors of rabbits and poultry were consulted before the decision to grant 10 per cent. Christmas preferential allowances to co-operative societies;
(2) in view of the fact that many retail distributors other than co-operative societies have increased registrations, on what grounds he sanctioned a preferential increase to some traders which is denied to others.

Mr. Gammans: asked the Minister of Food the constitution and function of an organisation known as A.W.D.I.P.A.R.; and what quota of imported poultry and rabbits has been allocated by it to the Co-operative Wholesale Society or any other co-operative society.

Dr. Summerskill: My right hon. Friend's decision to make available to those consumers who shop with retail co-operative societies increased supplies of imported turkeys, other poultry and rabbits, was taken in the light of evidence submitted by the co-operative societies

that their customers do not at present enjoy a fair share of these unrationed foods. For similar reasons he has allocated a higher proportion of the extra sugar now available for food manufacture to the co-operative societies. My right hon. Friend has stated that he is prepared to consider similar claims from any other well-defined group of traders.
This decision was not discussed beforehand with the Association of Wholesale Distributors of Imported Poultry and Rabbits Limited, which is an association of importers who prior to 3rd September, 1939, dealt in importing rabbits and/or poultry by wholesale. The association is managed by a council on which my Department has a majority vote, and its main function is to distribute imported rabbits and poultry in accordance with my Department's instructions. The association was, however, immediately informed of the decision so that they could consider its implications. The association has made certain alternative suggestions for distributing these increased supplies which my right hon. Friend is now considering.
The C.W.S., as members of A.W.D.I.P.A.R., at present receive about 1½ per cent. of total imported supplies of turkeys, other poultry and rabbits, and retail co-operative societies receive in addition a small quantity from other members of A.W.D.I.P.A.R. for which no precise figures are available, but which is not estimated to exceed 3 per cent. of total supplies.
As regards sugar for manufacture, in view of the fact that my right hon. Friend's decision did not involve reducing the existing allocation of sugar to any type of manufacturer he felt free to take this decision without consulting the food manufacturers.

Brigadier Peto: Is the hon. Lady not aware that this differential treatment in favour of one section of the industry and to the disadvantage of another is a departure from all previously accepted principles; and is she further aware that if continued it is bound to cause unlimited resentment amongst small traders?

Dr. Summerskill: No, Sir. It is our practice to listen to the grievances of any group of traders, whether they be cooperatives or private enterprise traders, and the co-operative retail societies had


a legitimate grievance. They have at the moment 14 per cent. of the meat registrations of this country, but were allocated only 1 per cent. of the rabbits and poultry from the C.W.S. and 3½ per cent. from the other wholesalers. Surely, this is a legitimate grievance?

Mr. Baker White: Was the re-estimation in favour of the co-operative retail societies based on the total number of customers as opposed to the total number of meat registrations?

Dr. Summerskill: It was based on the total number of registrations.

Mr. Fernyhough: Does not my hon. Friend think that this decision ought to be welcomed by the other side, in that the C.W.S. is the finest example of a property-owning democracy that can be seen?

Mr. Orr-Ewing: The Parliamentary Secretary has said that she is prepared to consider representations from "other well-defined groups," but as there are many small retailers not in any well-defined groups, how are they to make their representations in regard to the additional number of customers now on their books as compared with 1939?

Dr. Summerskill: The hon. Member is under a misapprehension. There is a national association which covers small retailers who have sent representatives to us on many occasions. We are prepared to listen to them on this subject.

Mr. Tolley: Does my hon. Friend not agree that the membership of the cooperative societies is generally known, and that the basis of allocations is, even now, far below what it might otherwise have been?

Mr. Low: Will the Parliamentary Secretary say why, at the time when the announcement was made that the cooperative societies' allocation was to be increased, the Minister did not also say he was ready to increase the allocations of any other traders or group of traders who had a similar claim, and why he waited until there had been a fuss in the

country before saying he was ready to consider their claims?

Dr. Summerskill: I think it was a day or two afterwards that they made representations to my right hon. Friend and he agreed to consider their claims.

Mrs. Ridealgh: Does my hon. Friend not agree that, far from receiving preferential treatment, the co-operative societies are not even receiving justice, as 15 per cent. of the meat registrations and 25 per cent. of the sugar registrations are with the co-operative societies and in both instances they are being given less than their just share?

Dr. Summerskill: That is quite correct. The allocations made to the co-operative societies do not now equal their registrations.

Mr. Walter Fletcher: Will the Parliamentary Secretary say why she allowed all this difficulty and fuss to arise instead of carrying out her proper function of considering the views of the small traders, whether they were in an association or not? Instead of waiting for a major grievance to arise and then trying to redress it, will she in future carry out the functions of a Minister efficiently and find out the facts first?

Dr. Summerskill: The door of my Department is open to every group of traders and they are always using it.

BIRTH OF A PRINCE (ADDRESS)

The Prime Minister: I am sure the House would like to have an opportunity of expressing its satisfaction and joy at the happy event of yesterday, and I therefore give notice that I will move a Motion of congratulation to Their Majesties the King and Queen, Princess Elizabeth and the Duke of Edinburgh tomorrow.

NEW MEMBER SWORN

Austen Harry Albu, Esquire, for the Borough of Edmonton.

IRON AND STEEL BILL (Mr. SPEAKER'S RULING)

Major Sir David Maxwell Fyfe: On a point of Order. May I ask your guidance, Mr. Speaker, as to the nature of the Iron and Steel Bill, which will shortly come before the House? As I think everyone realises, the question on which we desire your guidance is not whether the Iron and Steel Bill is a Hybrid Bill, but whether it comes within the words of Standing Order No. 36? Perhaps I may remind the House of how that Order reads:
Where a public bill (not being a bill to confirm a provisional order or certificate) is ordered to be read a second time on a future day, and it appears that the standing orders relative to private business may be applicable to the bill, the examiners of petitions for private bills shall be ordered to examine the bill with respect to the applicability thereto of the said standing orders …
I do not think the rest of the Order arises on this question, which is whether the Standing Orders applicable to Private Bills may be applicable to this Bill? In other words, no opinion against sending a Bill to the examiners could be given unless the view is taken that it is impossible that the examiners should think that the Standing Orders relating to Private Bills should apply.
Perhaps I may say a word or two about a Hybrid Bill, as the matter is not within the immediate knowledge of everyone. The modern definition, of course, is that a Hybrid Bill is a public Bill which appears, on examination, to affect private rights. I fully accept the qualification that it is not the practice of this House to refer Bills dealing with public policy whereby private rights of a whole class are affected. That is the sense of one of the passages of Erskine May, page 490, which deals with this matter. The most recent definition of which the House has had advantage occurs in the Report of the Select Committee on Hybrid Bills. page IV:
" A hybrid bill … has also, in large or small degree, the character of a private bill, since it affects the interests of specific individuals or corporations as distinct from all individuals or corporations of a similar category.
I do not think there would be any question as to the definition, and it is on the point that it affects individual corporations, and not all corporations in a

similar category, that I ask for your opinion, Sir. Clause 11 of the Iron and Steel Bill sets out to nationalise, by vesting their securities in the Iron and Steel Corporation, the companies specified in the Third Schedule. It sets out to nationalise a list of 107 individual corporations. I submit there is no significance in the introductory words:
Subject to the provisions of this Part of this Act …
because apart from Subsection (3) of Clause II they do not give us a great deal of assistance. The form is to nationalise a list of companies and then, in Subsection (3), we have some merely descriptive words. In Subsection (3) it states that the companies it is designed to nationalise are those which—and I stress these words—in the opinion of the Minister comply with the conditions of the Second Schedule. Apart from that the only other provisions that could be relevant in this part of the Bill are those in Clause 20, which merely give to the Minister the right to exclude from the Third Schedule a company which, in his opinion, has got rid of its iron and steel plant.
Clause 22, which supports my contention, goes further. It deals with recovery of assets transferred, and gives the right to the Minister to recover assets which have been transferred without giving any of the notices or publications which it is necessary to give in the ordinary case where private rights are affected. This is, in form and in fact, legislation against a number of individual companies.
The second point which I would draw to your attention is in Clause 11 (3). There the question of subsidiary companies is introduced and certain conditions imposed where subsidiary companies are steel companies. It is matter of common knowledge that the companies affected in the list of 107 individual corporations have subsidiaries that are not steel companies, so that the position is that, apart from the companies themselves, the subsidiaries are divided into a number of forms of activity. In those forms one will have the position where part of the category carried on by the subsidiary is nationalised and part of the category is not nationalised, a blatant case in my submission of discrimination within a category.
The matter goes further than that and raises a matter of principle which is new and not covered by any precedent. in Clause 11 (3) there is an attempt—I say an unsuccessful attempt—by description or explanation to make a category, and, therefore, to get out of this difficulty. The category which is attempted to be made is one which will not stand examination for a moment. The category is not the companies that comply with the conditions in Schedule 2, but the companies which, in the Minister's opinion, fulfil the conditions set out in Schedule 2. I say quite plainly that is not a category at all, because when it is left to the Minister's opinion and the legislation is passed, there is no power on earth that can correct a Minister if he makes a mistake. The courts cannot say anything to him, and if the Minister is quite wrong no action can be taken at all. That is not a category, and on that alone the attempt to make a subjective classification depending on the whim of a political Minister is not creating a category which is affected within the precedents of this House. That is apart altogether from the inroad into the conception of a category which is made by the proviso that excludes the manufacture of motor vehicles.
The purpose of the distinction which I am venturing to impress upon you, Mr. Speaker, is perfectly clear. If the whole of a category is the subject of legislation, then it is right and proper, and has been recognised by the practice of this House for 500 years, that that should be a matter to be discussed by the representatives of the people in this House. If there is not the whole of a category and a discrimination is made between members of the category, then again for 500 years it has been the practice of this House that those who are discriminated against and between whom distinctions are made should have the right to make their own individual defence. I know tile common attack that is always made when lawyers raise a point. Therefore, I anticipate those who will make an attempt and in all seriousness I say that this is not a pettifogging or legalistic point. It is a question of common justice for people who are affected by individual discrimination.
I am sorry to detain the House for this time, but I should like to say a word about the precedents, which I am sure, Mr. Speaker, are in your mind. The

precedents, of which no doubt you are aware, are quoted in Erskine May on page 836. They really come down to two where your predecessors have come down on the side of the Public Bill and one on the side of the Hybrid Bill. The first one is that of the Railways Bill of 1921. I am sure that you have seen it at some time as well as the method of Ruling of your predecessor of that date. It is fully summarised in Erskine May where it is quoted:
Mr. Speaker ruled that the Bill dealt with a question of public policy affecting all the main railways of Great Britain.
Mr. Speaker, you may remember that in column 44 the then Speaker is dealing with that and makes it the keystone of the decision which he then formed.
The other example that is given is the Electricity (Supply) Bills of 1926 and 1934. There again the ground of Mr. Speaker Whitley in 1926 and Mr. Speaker FitzRoy in 1934 was the same, that these Bills affected all the undertakers of a particular class alike—that is there was no description within a clear and definite class. I respectfully submit to you, Mr. Speaker, that neither of these precedents is authoritative as saying that a particular class may be constituted by the whim of the Minister.
The other example in which the other view was taken is the example of the Canals Bill, 1905,
which did not apply to canals generally but which compulsorily transferred to the trust the undertakings of certain canal companies only, which were specified in a schedule.
That is the other point which I wish to put to you, that this raises a fresh issue which is not covered by the precedents in the House. The last thing I want to do is to raise any point which is of doubtful validity, and, therefore, I would only remind you that when Mr. Speaker Whitley ruled on the Railways Bill the question of the Standing Order to which I have referred was not mentioned to him. Owing to the research of Mr. Dennis Herbert, as he was then, it was mentioned in the case of the Electricity Bill. Since then there has been revision of the Standing Orders by which this Standing Order was transferred from those applicable to Private Business to Public Business. It, therefore, becomes quite clear in my submission that this is a definite problem posed to you by the Standing Orders.
The problem is not whether this is a Hybrid Bill, but whether there is a sufficient case for the Bill to be considered by the examiners. I submit that for all the reasons that I have given there is a case for consideration, and that the interest and rights of the companies affected ought at any rate to receive the safeguard that the examiners will consider their position, and when the examiners have reported the matter it comes back to this House.

Mr. Speaker: I have been asked to give my Ruling whether the Iron and Steel Bill should be referred to the examiners. I should like to thank the right hon. and learned Member for West Derby (Sir D. Maxwell Fyfe) for giving me notice that he was going to raise this question.
Our procedure is governed by Standing Order No. 36—(Bills which are prima facie hybrid)—which must be read in conjunction with Standing Order 224 relating to Private Business. Although Standing Order No. 36 first appeared in 1945 among Public Business Standing Orders it contained no new provision. The same procedure had been directed by Private Business Standing Order No. 216. It seemed more appropriate for' the provisions affecting public business to be put in Public Business Standing Orders. This was done without any amendment, other than by drafting Amendments.
It is laid down in Erskine May, page 490:
It is not the practice to refer bills dealing with matters of public policy, whereby private rights over large areas, or of a whole class, are affected.
This statement is supported by rulings of my predecessors, in 1921 on the Railways Bill and in 1926 and 1934 on the Electricity (Supply) Bills. In all these cases it was ruled that the Bills were matters of public policy and that they must go through the ordinary procedure of the House, without reference to the

examiners. Moreover, none of the large nationalisation Measures in relation to coal, transport, electricity or gas has been referred to the examiners, nor has this procedure been in any way challenged.
The purpose, as I see it, of the Iron and Steel Bill, is to bring under public ownership all important companies producing iron ore and certain basic iron and steel products, the limits for acquisition being laid down in the Second Schedule. This is a matter of public policy, as in the case of previous nationalisation Bills, and deals with private interests only generally, as respects a particular class. The Railways Bill of 1921 applied not to all railways but to all railways of a particular class, namely the main line railways. Similarly, the Transport Bill, though it provided generally for the acquisition of railway and canal undertakings, did exclude certain small undertakings not controlled by the Government during the war, and other undertakings whose railway or canal activities were not main activities of the undertaking. These seem to me to be very complete precedents for the action which has been followed in this case of not referring the Iron and Steel Bill to the examiners.
There is one other point to which I should perhaps refer. In Clause 11 (3) it is laid down that the companies which are to be taken over are governed by the Second Schedule, which states the minimum output qualifying for acquisition in four different types of activity. There is, however, a reference to those companies which, "in the Minister's opinion" fulfil the conditions. It seems to me that the Minister's opinion can only be given on the question of fact whether a particular company does or does not fall above or below the line,' and that this does not affect the principle in question. For the reasons, therefore, that I have given, I consider that this Bill should not be referred to the examiners.

Orders of the Day — IRON AND STEEL BILL

Order for Second Reading read.

4.4 p.m.

The Minister of Supply (Mr. G. R. Strauss): I beg to move, "That the Bill be now read a Second time."
There is general agreement that this Bill is profoundly important and vehemently controversial. It is interesting, perhaps, that controversy does not appear to be solely confined to dispute between the two major parties but, if one may judge from the Press at least, there seems to be a considerable range of opinion inside the party opposite. Some of their papers denounced the Bill with unbridled vehemence. Others, possibly because they found the contents of the Bill rather different from what they had prophesied, described it as "half-hearted," "timid" and "feeble." One even went so far as to call it "Strauss's mouse."
As far as public opinion went, the ubiquitous Dr. Gallup, took a poll before the Bill was published, and discovered that the majority of our population was against it. Well, Dr. Gallup has been known to be wrong. We, on this side, are confident that whatever public opinion may have been before this Bill was published, as over the coming months the Debate inside and outside the House proceeds, so the great majority of the people will share the Government's view that if our country is to prosper and our people to live a higher and a better standard of life, this Bill is essential. We base this belief, not on dogma or abstract theories but on the known facts, and the conclusions to which they inevitably lead. I hope that our opponents will address their arguments objectively to the merits of the proposals, and discard their ideological prejudices in favour of private ownership and private profit.
It is a platitude, perhaps, to talk of the importance of the steel industry. All parties agree upon that. Without steel the life of Britain would collapse. So far as I can see there is not one trade of importance that could be carried on without it. All our capital equipment depends on steel. Steel, and steel-using industries, account for nearly half the value of our exports. This proportion has grown con-

siderably since the war and may well grow further. Our future dependence on these industries in achieving solvency and prosperity will then become even greater. Not only our prosperity, but our security and influence on world affairs will depend largely upon our iron and steel industry; on whether it is efficient enough over a long period to produce cheap steel in ample quantities, and responsive enough to national requirements. It is because we believe that it cannot become either of these things as long as it remains in its present private ownership that we have introduced this Bill. We should have been failing in our duty if we had not done so.
There are, as far as I know, only three ways in which this industry can operate. Its ownership and control can be left in the hands of the steel masters as in the early pre-war years; or ownership can remain with the steel masters subject to a certain amount of State supervision through a body such as the Import Duties Advisory Committee or the Steel Board. Alternatively, and this is the only solution which appears to us satisfactory, ownership and control can be combined in the hands of the State.
It is, I think, generally conceded that a return to unregulated private ownership is out of the question. The memory of those days—and a very bitter memory it is to those who worked in the industry—is still fresh. Authoritative commentators of all shades of political opinion have condemned the industry's activities during those years with varying degrees of pungency, but it is no part of my case, nor do I desire, to condemn the men then in control of the industry, except in so far as they defended the system that wrought such havoc. They were themselves the victims of the capitalist system in which they believed, and everything they did, however deplorable the consequences may have been, was no doubt done with the best intentions to further the interests of the particular concern for which they were responsible. They were conscientiously trying to do their duty to the shareholders who employed them.
Whether the blame should rest on these men, the Government of the day, or the capitalist system, the fact remains that during those years the industry was torn with conflicts between producers, the banks, and the Government, that new


projects which could have brought employment were postponed, and some, such as that at Jarrow, were killed after years of discussions, and the necessary finances could not be found to re-equip and modernise the industry. Even after taking into account the £50 million spent during the thirties, the total spent for this purpose in the inter-war years was pitifully below the amount needed to provide an efficient industry. All this did grave damage to the country and none deplored it more than those who worked in the industry, executives as well as operatives, who found themselves shackled by these misfortunes and too long and too often deprived of the opportunity of employing their talents.
It is unthinkable that we should revert to any comparable private ownership system. Indeed, responsible leaders of the industry today themselves reject the idea and agree that private ownership must be tempered by State control. What do they propose'? That the industry should remain in private ownership, tightly organised within the Iron and Steel Federation, which the right hon. Member for the City of London (Sir A. Duncan) so ably dominates. This Federation is the authority that effectively controls the industry and is thereby in a position to wield an immense influence on British industry as a whole, and indeed on the State itself. It is, in fact, a vast monopoly, or cartel, possessing great powers without responsibility over the well-being of our people.
The right hon. and learned Member for Montgomery (Mr. C. Davies) described it in these words in the House two years ago. He said that the Federation:
have all the faults of monopoly, as far as I can see, but not the usual benefits of monopoly."—[OFFICIAL REPORT, 27th May, 1946; Vol. 423, c. 911]
I would not myself go as far as the right hon. Gentleman, but in view of his very strong views—and I am sure he would not have expressed them without having all the information about the industry before him—I am looking forward to hearing from him what remedies he advocates more drastic or more speedy than those which we propose in this Bill. I am all the more anxious to hear his views in view of a sentence

which appeared in a booklet which came out a few years ago entitled, "A Radical Economic Policy for Progressive Liberalism," which says:
Steel, coal, transport and power are examples of industries which it is vital should be owned by the community.
That pamphlet bears four signatures. The first one is that of the right hon. and learned Member for Montgomery.
The responsible leaders of the industry say that the Government should exercise such influence over the Federation and its affairs as may be necessary, through some such machinery as the Iron and Steel Board. I should like to say here, in view of statements that have been made by some leaders of the industry, that the Government never conceived the Iron and Steel Board as anything more than a stopgap. It was clearly stated by my predecessor at the time of its establishment that the Board was set up to link the industry with the Government until nationalisation could be effected. The members of the Board have performed their difficult task admirably, but this setup is and always has been in the Government's opinion wholly unsuitable as a permanent method of control.
Firstly, and this lies at the heart of the matter, it does not enable the Government to exercise a sufficiently positive influence. The industry and individual producers can be told what not to do. but in most matters not what they must do. This means that while any proposals put up to us by the industry can be vetoed, neither the Board nor the Minister has effective power to ensure that other proposals, however desirable they may be, will be initiated, let alone carried out, if the directors of the individual concerns do not like them.
This situation is unavoidable where control and ownership are in separate hands. No controller can ever order an owner to spend money he does not want to spend. We had experience during the war of the unsatisfactory nature of this sort of arrangement. It sometimes happened that where a works for some reason or another was lagging in the production of war materials, the Department concerned appointed a controller to direct its affairs, but sooner or later he usually found he was powerless. He had no authority to compel shareholders to spend the money he considered neces-


sary, nor, indeed, could he command the co-operation of an unwilling management. Finally, when the conflicts and delays had become intolerable, the Government was forced to acquire the concern; and then, and only then, when ownership and control were combined, could progress be made.
In our view it would be madness for a Government determined to build the nation's future prosperity on sound economic foundations to perpetuate in this basic industry a system in which serious clashes on matters of major policy between private and public interests are bound sooner or later to arise. possibly with the gravest consequences. To take such a risk would be to fly in the face of commonsense and experience. We are not prepared to endanger the welfare and security of the country in this way. We say in short that the iron and steel industry shall no longer be distracted by two loyalties. Schizophrenia is a malady as dangerous in an industry as in an individual. And if it is said that this malady has not yet reached a harmful stage, I reply that it is far better, and far easier, to cure it before it becomes chronic.
Secondly, under a system of divided loyalties, where physical ownership remains in the hands of private individuals, the Government are bound, in fact, to be at the mercy of those individuals, for they are the men in possession. They possess not only the physical assets, but the technical and commercial "know-how" essential for a proper appreciation of the industry's planning problems. They can at any moment withdraw their co-operation from the Government of the day. This is no theoretical danger. Only recently, as the House is aware, the employers' representatives on the Iron and Steel Board, together with some other members, refused my invitation to continue their work because of their objection to Government policy. They were, of course, at perfect liberty to do so, and others would be at perfect liberty to do so again at any time they disagreed with Government policy. The Government refuse to perpetuate an arrangement where, in what might be a matter of life and death for the nation, it can at any moment be thwarted by non-co-operation from the steel masters. This, I should

have thought, was a situation no Government and no Parliament could tolerate.
I now want to say a word about efficiency. Some spokesmen of the steel industry claim that it is already efficient, and in support of that they say that British steel prices compare very favourably with those of any other country in the world except Australia. This argument can only be accepted with serious qualifications. It does not take into account the effect of our Government subsidies and price controls. I am not sure if those controls are among the ones which hon. Gentlemen opposite want to abolish, but I hope they will tell us if that is so during the Debate. The fact is, however, that if we withdrew the subsidies on imported ore and scrap—and I may say in parenthesis that the question of subsidies to this industry is now under review—and if we also withdrew the control price on scrap, and the British steel industry had to buy its material at the same prices as the Americans do, then our steel prices would in the main be above American prices, despite the fact that American wages are much higher.

Mr. Walter Fletcher: What about rising coal costs?

Mr. Strauss: Comparisons, I admit, between countries are apt to be misleading, as so many conditions are different. But it was, of course, the leaders of the industry who introduced this argument, and I must point out that there is nothing in the above comparison which gives ground for asserting that all is well with the efficiency of the British iron and steel industry. All is, in fact, not well.
I acknowledge that in the main the present management of the British iron and steel industry is good but a substantial proportion of its plant and equipment is antiquated and inefficient. The proportion estimated by the industry itself, when it brought forward the development plans, was over 30 per cent. This situation is partly due to the inability of the industry to re-equip itself during the war period, but it is also partly due to the failure to modernise the industry adequately during the inter-war years.
We do not believe it is possible for the necessary drastic changes to be made in


our steel industry to render it 100 per cent. efficient as long as private owners with sectional interests remain in possession. A certain amount can be done, and is being done now, by voluntary agreement under the development plan which the industry put forward. In the early stages of that plan the impetus for development is there, because in boom conditions nearly every company is anxious to remedy some of its more serious deficiencies in plant and equipment, and this impulse, together with the priority which the Government have given the plan has enabled good progress to be made.
It is at the next and subsequent stages, when the first urgent improvements have been carried out and the further steps for reorganising the industry have to be settled and implemented, that the sectional interests of multiple owners inevitably stand in the way. To rationalise the industry properly, and so get the maximum efficiency, a single owner must replace the many, and no one, I believe, will dispute that that single owner must owe undivided allegiance to the State.
I come now to the question of the industry's capacity. It is naturally more advantageous for private owners of the steel industry to have a total productive capacity below potential demand. They would rather be reasonably certain of being able to sell limited quantities of products at good prices than risk heavy expenditure on new plants which might from time to time prove redundant. On the other hand, it is in the interests of the country and of consumers of steel that productive capacity should be capable of meeting industrial requirements in peace, and military requirements in war. I am far from saying that the steel industry should be expanded, regardless of economics, to meet the peak demand which the most optimistic can foresee in the next decade or so.
But in estimating the steel demand for which we should cater, we cannot—we dare not—be conservative and cautious as the steel industry has been and is bound to be, as soon as the present boom conditions fall off. Moreover security against possible aggression is, unfortunately, still a problem for us, and iron and steel capacity is still the

best single index of the war potential of a modern state. For all these reasons it must be for the nation and not for private owners to decide what the capacity of the British iron and steel industry should be, and this again can only be done effectively if the nation becomes the owner.
It is clear, however, that the pattern of national ownership appropriate to coal, gas, electricity and transport, would not suit the iron and steel industry. The units that comprise this industry vary enormously, not only in the type of product they make, but to the degree that they are engaged, directly or through subsidiaries, in ancillary activities, from mining iron ore to the manufacture of finished products. Moreover, many of these firms bear names which are known and respected throughout the world and are a source of justifiable pride to their managements and all their employees. To destroy the individuality of all these concerns would be regrettable, and to break up abruptly and wholesale the industrial combinations of which they form a part would cause a serious dislocation over a wide field of industry.
For these reasons the Government decided that the wise course was to depart entirely from precedent; to preserve the entity of the companies which come within the scheme, and to effect our purpose simply by transferring their securities from the present holders to a public corporation. By this means it will be possible to combine all that is best in private enterprise with public ownership.
We, therefore, propose in the Bill that there shall be an Iron and Steel Corporation of Great Britain owning all the securities of the major concerns at the core of the industry—that is, the sections of the industry responsible for the production of iron ore, pig iron, ingot steel or the hot rolling of steel. These are the activities defined in the Second Schedule. The Corporation is empowered to enter the business of steel production and its ancillary activities, but it is intended that it shall normally operate through the companies it will own. The Corporation will inherit all the powers the companies possess in their memoranda of association, but none of the companies can alter its own memorandum without the consent of the Minister.
The Minister can give the Corporation directions of a general character which appear to him to affect the national interest. It is, of course, essential that there shall be the closest co-operation between the Minister and the Corporation on all matters of general concern. The Corporation must have the national interests, as seen by the Government of the day, constantly before it. The Minister is able to order that any of the activities of the Corporation or any of its companies be stopped or restricted.
I can see no reason why publicly-owned companies should not be able to pursue the same industrial activities as the companies were able to pursue when they were privately owned. The marginal activities of the companies have not been undertaken by accident. They have been developed by the present owners of the industry as a part of the efficient exploitation of the processes of steel-making, and there is no reason why the Corporation should not embark on its task with the same technical and administrative advantages as its predecessors.
Some idea of the extent to which the publicly-owned companies will be engaged in outside activities can be gained from the figures of employment. The companies concerned employ a total of about 300,000; 200,000 of these are directly employed in what I call Second Schedule activities; about another 30,000 to 35,000 are employed at the finishing end of the business in tubes, wires, and iron founding. Of the balance of 65,000 to 70,000, 12,000 are engaged in the manufacture of bolts, nuts and screws, some 35,000 are engaged in general and constructional engineering, 7,000 to 8,000 in other metal working industries, including non-ferrous metals, and some 5,000 to 10,000 are engaged in miscellaneous employments, such as chemicals, etc. The biggest block is constructional and general engineering. A labour force of 35,000 is admittedly impressive, but it represents less than 4 per cent. of the total number employed in engineering, and the other 96 per cent. will still be employed under private ownership.
The Corporation will be the sole shareholder of every company that on the average of the years 1946 and 1947 produced more than 50,000 tons of iron ore, produced more than 20,000 tons of pig

iron, or 20,000 tons of ingot steel, including alloy steel, and shaped more than 20,000 tons of steel by hot rolling. In considering how to attain our objective of public ownership we were faced with many problems, none greater than that of demarcation. Which firms should be taken over and which left outside? The leaders of the industry thought that this problem was insoluble and asserted that we should be forced to break up a vast number of closely-knit industrial structures with chaotic effect over a wide area of industry. They anticipated that we would take over the large steel-making concerns and sever them from all their subsidiary and ancillary activities to which they were firmly linked.
But we, too, appreciated the folly of such wholesale dismemberment. Apparently, it never dawned on these prophets of woe that we might be intelligent enough and bold enough to avoid this difficulty by the simple expedient of taking over in the first instance not only the steel-making plants, but also their subsidiaries, lock, stock and barrel.
I gather that some of the official spokesmen of the industry are somewhat annoyed with us, not so much because we are taking over more than they anticipated, but because we have deprived them of their best argument against nationalisation. In view of their oft-repeated declarations that because of the ramifications of the industry there was no practical way of nationalising it, it is amusing to see that some of our bitterest critics in the Conservative Press, while attacking the Bill on other grounds, admit that the scheme we suggest is a practical one.
It was partly because we were so anxious to secure our purpose with the minimum dislocation that we chose the figure of 20,000 tons as our datum line. To have chosen a larger figure would have meant breaking up the machinery which co-ordinates the activities of these firms within the Federation and that, I am sure, would have been a mistake. To have chosen a lower figure would have meant taking over many more companies and making the task of the Corporation too unwieldy. The 20,000 figure brings in the larger part of the industry responsible for 90 to 100 per cent. of its basic products.
The exact proportions of the major products are: iron ore, 97.5 per cent.; pig iron, 97.6 per cent.; steel ingots, 99.3 per cent.; hot rolled products, 93.6 per cent. We propose leaving outside those smaller concerns, mostly making specialised products, who are likely to prosper without the benefits conferred upon them through membership of the Corporation's family. They, too, if they desire, can come in later by mutual agreement. There will, of course, have to be some co-ordinating machinery between the nationalised and the non-nationalised sections of the industry, but that will not present any serious difficulty.
It is also because of our desire to avoid dislocation, and our anxiety to preserve the most valuable fruits of this industry's past activities and successes, that we propose to keep intact the identity of the individual concerns. Their personnel and internal organisations, and such esprit de corps as they may have achieved, will be unaffected. Indeed, on the morning after vesting day the only difference for them will be that the ownership of the securities has changed hands. The companies will continue to win ore, produce iron and steel and sell their products as before.
But that does not mean that the new shareholder will adopt the same passive attitude to the companies as did the old shareholders. On the contrary, it is our desire that the Corporation should be active, not by interference with the day to day management of each works, but in planning the overall efficiency of the industry and seeing that those plans are carried out. That means that where directors are weak, or management is below standard, the Corporation will cut out the deadwood and, in consultation with the boards concerned, strengthen their organisations by the appointment of new men, many of whom, I hope, will be drawn from ranks not normally considered for posts of higher responsibility.
While we are anxious that these improvements should be made as quickly as possible we do not anticipate, nor do we think it would be wise, that sudden or drastic changes should be made in the early days of the Corporation's life. No man however, who pulls his weight, whether as a director or a labourer, need

fear for his position at any time. Indeed, we are convinced that the changes in ownership will emancipate managements and technicians from many of the handicaps that have restricted and often embittered them in the past. I believe that all those who are responsible for the successful working of the industry will find that this Bill will give them greater opportunities of applying their skill, ingenuity, enterprise and enthusiasm than they have ever known before.
Under our proposals, the spur of competition as an incentive to efficiency will in no way be blunted. I do not mean that different units will be able to undercut each other on basic products. That does not happen today and did not in the pre-war years. But, consumers wanting particular types of steel will be free to place their orders with the companies that offer them the best quality product at the best price. Moreover, the Corporation will be able to satisfy itself that effective accounting and costing systems are in operation, so that the efficiency of one works with another can be compared. It will not have escaped the notice of the House that the Corporation must publish its consolidated accounts in full, and that an obligation rests on the companies to disclose their accounts too.
The total number of firms scheduled for transfer is 107. Eighty-three of these are parent concerns and 24 are wholly-owned subsidiaries producing above the datum level. About 150 other wholly-owned subsidiaries will also come into the fold, most of them engaged either in the iron and steel industry, or in activities closely associated with it. There is only one exception to the general principle of the 20,000 minimum datum level and that is the Ford Motor Company, who own a blast furnace producing a quantity of pig iron substantially above the 20,000 figure. We made this exception, not as has been suggested, because of representations received from any American interests—we have received none—but because we thought that this company, which produces pig iron primarily for the purpose of the manufacture of its cars and tractors, two highly specialised products, should properly he excluded. We are firmly of the opinion, however, that the peculiar features of this company's activities do not apply to any of those we do propose taking over.
Among the 107 companies, there are a few who may eventually be omitted. In drafting the Bill, we were aware that certain companies were forming new subsidiaries so as to segregate their iron and steel production from their other activities. But we had not got all the information required on the relations of the parent with the newly-created subsidiaries in the operation and ownership of their iron and steel works, and it was impossible for us to make the necessary inquiries without disclosing to the firms concerned that they were likely to be affected by the Bill. That information will, however, now be forthcoming, and we shall be able to omit, at the Committee stage, the names of any companies who can show that they do not operate or own plant which would qualify them for public ownership under the terms of the Bill.
We do not wish firms not taken over to be in any way handicapped in their ordinary activities, or even in extending their capacity within reasonable limits. The Bill, therefore, provides that firms producing under 5,000 tons of ore, iron, steel or hot rolled metal, shall be able to carry on their business without licence, or any conditions whatever. Those between 5,000 and the datum figure may obtain a licence as of right and may either double their 1946–47 production, or achieve the datum figure, whichever may be the less. They can go, moreover, beyond this with the permission of the Minister after he has consulted the Corporation. We want all firms in the iron and steel industry, outside the nationalised sector to have every opportunity to prosper. The only restriction placed upon them is that they may not extend their production to such a degree as to make the integrated working and efficiency of the major publicly-owned sector impossible.
The Corporation has the power to shed and return to private ownership any subsidiary which it considers is not related to its main functions and whose detachment would be administratively, or economically, desirable. The Minister, as I have said, has powers to order the Corporation to restrict any of its own activities or those of its companies. Each case will be considered on its merits. There has been mention of the mineral water, safety pin tennis racquet

and similar subsidiary businesses in which it is said, and sometimes with expressions of horror, the Corporation will acquire shares. Why the prospect of the production of good mineral waters or safety pins or tennis racquets should fill hon. Gentlemen with alarm, I don't know. I cannot say whether these particular by-products will be candidates for expulsion. We shall have to find out, among other things, why the present owning steel firms believe it desirable to link such firms with their own.
I can see no harm in the possession by the Corporation of the shares of closely linked engineering or other firms who are now the subsidiaries of iron and steel companies. Transfer of shares from one party to another does not in itself affect the prospects or prosperity of a company. Critics suggest that it is undesirable for a publicly-owned company to be in competition with a privately-owned company. On the contrary, this is likely to be highly beneficial, in that both the publicly-owned and the privately-owned companies will be subjected to the competition of each other. What is wrong with that? Do people fear that private industry cannot withstand the superior efficiency of public industry?

Mr. Churchill: You will take care of that.

Mr. Strauss: The Corporation will have to see to it, of course, and if it does not, the Minister certainly will, that in allocation of materials or their price no unfair advantage is available to the publicly-owned companies. If this, nevertheless, were to happen, or, it may be, alleged to be happening, it would be brought to light, either through a consumers' committee, or through the normal machinery of Parliament.
I want to say a word about the transfer of ancillary activities before the Corporation is established. I recognise that a number of the companies are now engaged in end- and by-product activities whose connection with the basic processes of iron and steel may be remote. Nevertheless, those activities have in general been undertaken for sound commercial or technical reasons and I suspect that the leaders of the industry would agree with me that it would be unsound for disintegration to be encouraged. On the other hand, the Government have no


desire to stand in the way of the normal development of the industry, and if any company has sound plans for dividing itself up between iron and steel and related activities on the one hand and clearly unrelated activities on the other, I shall be prepared to consider such proposals sympathetically if, and only if, it can be shown that the two parts are independent of each other, that each will be a viable unit and that there are good economic reasons for separation.
A substantial section of the Bill is devoted to ensure that there shall be no dissipation before the vesting date of assets, either financial reserves or otherwise, now held by the companies whose shares are to be bought. We have provided, too, that any imprudent contract entered into after 21st October, 1947, the day on which the Prime Minister categorically stated the Government's intention to nationalise this industry during the lifetime of this Parliament, can be challenged by the Corporation and any consequential dispute settled by arbitration. I do not want to take up the time of the House in enlarging on these numerous and, I fear, rather complex Clauses, except to say this.
We have no reason to believe that the directors of the firms to be taken over will in fact take any action detrimental to the interests of the new Corporation and of the iron and steel industry as a whole, but, for removal of doubt, the Bill states specifically what they should not do and what the penalties for the evasion of its provisions would be. The Bill endeavours to make it clear, and if, because of the necessary legal phraseology, it does not wholly succeed, I want to make it clear now, that no proper action taken by any company in the normal course of business would be challenged. But, if any company has any unusual proposal in mind about whose validity its directors may be in doubt, they can put their proposal to me and my consent will relieve them of the fear of any subsequent trouble. I anticipate, however, that such proposals will be few.
There is one further point in this connection, and it is important. We appreciate that we have left open a number of possible loopholes which a company, determined to deprive the Corporation of some of its assets, could use as the Bill

now stands. If we had so desired we could have stopped up every one of those loopholes, but to do so would have involved restrictions over so wide a field of industry as to hamper many legitimate business transactions. We were unwilling to do this and felt it would be better to rely on the good faith of the boards concerned. If, however, it should be found, in spite of these warnings, that attempts are made to circumvent Parliament's purpose by any of the devious means which may still be open, then the Government will either amend this Bill at a later stage, or if necessary, bring in a further Bill authorising retrospective action to recover whatever assets may have been whisked away.
It is essential that where there is a powerful monopoly, consumers should be able to get their grievances not only aired, but righted. This is normally impossible under a privately owned monopoly. But it can be done under a publicly-owned monopoly. To do this the Bill proposes the setting up, either of a number of consumers' committees or one consumers' committee with a number of subcommittees where the views of consumers can be fully considered. The Bill does not say precisely how these committees will be composed, for the very reason that we consider it to be of the greatest importance that they should be swift and effective: and this, we feel, can best be secured after consulting the consumer interests concerned. The system must make sure that any grievances about price, delivery, quality or any other matter will be properly ventilated and discussed with the Corporation.
If the consumers' committee concerned is not satisfied that the remedial action taken by the Corporation is reasonable, this will be stated in a report to the Minister. If the Minister thinks, after consultation with the Corporation, that a grievance is justified he can give specific direction to the Corporation to rectify it, and Parliament will no doubt call upon him to do so if he fails. By this means steel consumers will have more power to get their complaints remedied than they have ever had before. As we all know, many such complaints have been made in the past and they have often been vehement. It is no doubt for that reason that I have found surprisingly wide acceptance of the principles of this Bill among many important steel consumers.


This attitude has probably not been expressed to the leaders, of the steel industry, who would, no doubt, be equally surprised if they realised the number of important men in the iron and steel industry itself, who also privately approve the provisions of this Bill.

Mr. Edgar Granville: In reference to the consumers' committee, I understand that the consumer—the user of steel—will have the right to represent his case and give Parliament an opportunity to consider it. Is it intended to give the small producer—the small efficient unit which will be left outside this Bill—the same opportunity to represent his views to a consumers' committee, apart from the other provisions of the Bill?

Mr. Strauss: If he is a consumer of steel as well as a producer, he can come before the consumers' committee.
I want to say something about the compensation provisions of the Bill. We have been violently attacked by the City for adopting the principle of purchasing the securities of the companies concerned at their Stock Exchange quotations. I can see no justification whatsoever for this complaint. It has been long accepted as equitable that when a citizen is dispossessed by the State or local authority of something he owns, he should be paid compensation calculated on the basis of a fair price in a free market, such as will enable him to buy property similar to that of which he has been deprived. This principle, long accepted by all parties, is the one we are applying here, and is the one endorsed by Parliament in a number of previous nationalisation Measures. The property the State is acquiring from a number of its citizens on this occasion is their securities in certain companies. The only question really is what is the fair value of this property. In the Government's view there can be no fairer criterion than the old well-established one, the price their property is fetching in a free market.
The Stock Exchange is a free market where the securities are constantly changing hands between willing buyers and willing sellers. Shares are bought and sold at prices which investors think fair, taking into account the advice of those people who are the most knowledgeable and experienced in judging these things—responsible financial consultants expert

writers in the Press, and the stockbrokers, who spend their time comparing the records and prospects of one company with another and industries as a whole with each other. There can, therefore, be no more equitable way of ascertaining the value of the steel securities concerned than the Stock Exchange quotations arrived at in this was——

Mr. W. Fletcher: After you have rigged them.

Mr. Strauss: It would only he invalid if it were alleged that Stock Exchange quotations were in any way "phoney," in which case, as an ex-City man, I am prepared to come hotly to the defence of the Stock Exchange. Let me put it another way. There is no conceivable injustice if a shareholder who has bought his shares a month ago at 20s. is paid 20s. for them by the State. If, on the other hand, the State were, on any other compensation basis, to pay an investor or speculator 30s. for shares he had bought a month ago at 20s. that would be grossly unfair to the public, whose interests have also to be safeguarded. The additional money, moreover, would be a tax-free bonus. If we were to pay such a bonus to the holders of steel securities we would no doubt be bombarded, by demands from investors for the nationalisation of almost every other industry in the country, which might be very awkward for the party opposite.
In all this controversy, a vital fact which all should appreciate is that nearly all shareholders who have bought their shares within the last 10 years or so will receive in compensation more than they paid for them. I do not, therefore, find the clamorous importunities of the Stock Exchange impressive.

Mr. Dodds-Parker: Why is it, therefore, that a man who is guilty of owning steel shares is not allowed an appeal to a tribunal? Why do the Government refuse arbitration?

Mr. Strauss: Because we have, fortunately, in the Stock Exchange a method of ascertaining a fair price at which to sell and buy shares, based upon a free market where shares change hands daily between willing buyers and willing sellers.

Mr. Dodds-Parker: Then why do not the Government allow the man of whom I spoke to appeal?

Mr. Strauss: There is, however, a special argument which has been advanced—it was mentioned just now by an hon. Member—and which at first sight appears plausible. It is, that the shares to be taken over by the Corporation have been artificially reduced in value by the Government's ban on increased dividend payments, and that if it were not for Government action pursued for another purpose, steel share prices would, be quoted higher and the compensation payable to their owners would be higher. Let us look at a comparable example in another sphere. When a local authority buys a house for statutory purposes or, indeed, if a private person buys a house as an investment, the basis of compensation or payment to the landlord is the current value of the house, taking into account any statutory or other restrictions which may apply to it, such as the Rent Restriction Acts. Although these at present severely limit the earning capacity and the value of the house, it has never been considered inappropriate, indeed it has been generally accepted, that compensation should take into account such overall restrictions and liabilities as may be applicable to all-similar properties.
If a dividend limitation had been placed on steel shares alone, there might well be justifiable complaint about our proposals. But this is not so, therefore our proposals are indistinguishable in principle and effect from those applied by all parties, including hon. Members opposite, in the purchase by the public of private property.

Mr. W. Fletcher: Is not a simpler comparison that of one barrow boy throwing dirty water over the fruit of another barrow boy, thinking he may buy it in cheap?

Mr. Strauss: I think that the hon. Member is being a bit too funny.

Mr. Odey: Does not the right hon. Gentleman realise that the limitation of dividends was a voluntary act?

Mr. Strauss: Well, it was a voluntary act which was generally accepted, and if the steel companies had increased their dividends I think the consequences and after effects would have been equally to the detriment of those companies. It must be remembered that the Government control the price of steel.
One further point on compensation: Steel share prices and comparable industrial share prices have been moving on parallel lines for the last two years. Recently steel prices have outstripped the others; proof surely that steel share prices have not been adversely affected by the fear of nationalisation, as has been alleged in some quarters. More can and will be said on this matter during the course of the Debate, but I do not at the moment propose to discuss it further as my right hon. and learned Friend, the Chancellor of the Exchequer, will he doing so tomorrow.
The Bill provides for regulations to be made for fair compensation to any employee working in one of the companies to be acquired, or one of their wholly-owned subsidiaries, if he or she should lose their job as a direct result of nationalisation. It also follows the precedent of other nationalisation Measures in providing for machinery for effective discussions between management and workers on all matters of mutual concern, including production efficiency.
The House will have noticed that the day on which the Corporation will begin to operate as the legal owner of all the shares concerned is 1st May, 1950, or such later day within 18 months of the passing of the Act as the Minister may decide. The suggested date appears to us at the moment to be appropriate, as apart from the fact that 1st May is the day on which the people of the world for centuries past have heralded the arrival of better days and happier the arrival of better days and happier times——

Mr. Churchill: It may well be the Election day.

Mr. Strauss: It may well be. The 1st May, 1950, is the day on which the Corporation should be ready to start discharging its responsibilities.

Mr. Dodds-Parker: They are frightened of trying it before.

Mr. Strauss: This Bill will become law in the normal course of events by the end of the Summer of next year, if it takes about the same time to get the approval of the two Houses as the previous nationalisation Measures. That would allow nine months after the Royal Assent for the necessary arrangements to


be made before the vesting day. It has been suggested that in spite of the electoral mandate which the Government obtained for this measure, it may be rejected or suffer death by a thousand cuts in another place. I hope not, but even if this happens it would, nevertheless, still be technically possible to vest on 1st May, 1950. The Government feel, however, that it would be wiser not to bind themselves completely on this matter as there may conceivably be good practical reasons for varying the day. We therefore ask the House to give us this discretion, although I want to make it clear that the Government at the moment consider 1st May, 1950, the right date.

Mr. Churchill: What does the right hon. Gentleman mean by "varying"? Does he mean extending it, or bringing it nearer?

Mr. Strauss: I mean postponing it. We do not consider it would be practicable to vest before 1st May, 1950. We are taking powers to make the date a little later if it is found to be desirable.
I do not propose to expound further the other contents of this Bill today, as if I did I would try the patience of the House too much. It would, however, possibly interest the House if I stated briefly the sort of work to which the Corporation is likely to devote itself in the early days of its life.
The following matters will plainly be on its agenda. The establishment of relations with the companies it owns and in particular ensuring that these companies will have ample freedom of initiative and competition with which to carry on their activities; setting up the appropriate co-ordinating machinery with the various producers still in private ownership; working out with my Department the most effective organisation of consumers' committees; reviewing price policy; examining what steps should be taken to establish better training schemes and to develop research; deciding what other common services it can render to the industry, including possible purchasing and selling arrangements and no doubt some of the services now rendered directly or indirectly by the staff of the Iron and Steel Federation, and considering in the light of the circumstances of the time and in consultation with the Government, what the total productive

capacity of the industry should be. Its major task, however—and this will be a continuing one—will be to review the development plans and to devise schemes of rationalisation to improve the efficiency of the industry as a whole.
Some of our opponents say that as the bad relationship between the employers and employees in the coal industry was a major argument in favour of nationalising that industry, and as this relationship in the steel industry is good, we have no case for proceeding with this Bill. A little time ago I was discussing the nationalisation of this industry with one of its more progressive employers. He was against the idea in principle, and told me in justification of his opposition about the happy atmosphere in the works which he controls.

Mr. Churchill: May we have the name? Because if authorities are cited it is best to give the name.

Mr. Strauss: No, Sir. This was a discussion which we had privately, and I am not prepared to give the name. The right hon. Gentleman will appreciate shortly that there is no point in giving the name.
He talked of the successful steps he had taken to create that atmosphere and to secure the co-operation of his employees. Not realising in his enthusiasm. the implication of his remarks, he concluded by saying, "If only we could get out of their heads the idea"—he was referring to the workers of course—"that their extra exertions put money into the pockets of our shareholders, then, I am certain their co-operation would be complete and their output would rise even more." Well, that is precisely what we propose to do and we shall see whether this steel master's prophecy was right.

Mr. Henry Strauss: Do I understand from the last remark of the right hon. Gentleman that when there is a single shareholder, the State, it will be the aim not to put any profits into his pocket?

Mr. G. R. Strauss: The profits will go to the public and not to the interests of any particular section of the people.
Fortunately the relationship between workers and managements in this industry has on the whole been good; there are some sections of the industry, however, where the management is—shall I call


it old-fashioned—in its outlook about co-operation with the workers, and I think that in the industry as a whole much more can usefully be done in bringing to bear on its problems the knowledge and experience possessed by its workers. Some steel owners argue that because the industry is producing more and more steel it should not be disturbed. I have, on many occasions, and so have my colleagues in the Government, expressed admiration for the way the managements and operatives in the steel industry have been increasing production, and I repeat here that I have the highest regard for all those serving the industry, whether they are in the Federation offices or doing an administrative or a manual job in a works. They did magnificently during the war in spite of the absence of adequate modern equipment, and they are doing exceedingly well now.
But the country should realise that one of the most important reasons why production has risen so much is the response of the operatives in the industry to the national appeal for increased production. They benefit financially, of course, and no one can object to that, in higher wages from a greater output, but it must be remembered that at the time that the working hours of many other industries were being reduced, the workers in the iron and steel industry agreed to the continuous shift system. Why? Because they wanted to help their country and because they had confidence in the Government's proposals to nationalise their industry. The continuous working week accounts for an additional production of about three-quarters of a million tons of steel a year. That is the main cause—not the only, but the main cause—of today's record breaking steel output. I am certain of this, that if for any reason this Bill did not find its way to the Statute Book, there would be demoralisation among a large section of the workers in the industry, and, inevitably, output would suffer.
It has been suggested, on the other hand, by the spokesmen of the industry that the introduction of this Bill may lead to a fall in output, because the managements will devote so much of their time to fighting the Bill. I do not believe that the men who actually make the products of this industry, or

organise their production, are likely to sabotage the industry, or that the boards of directors need devote any significant part of their time to political controversy during the coming months. The industry does not lack able and enthusiastic spokesmen in this House, who, I am sure, will now, as always, admirably fulfil their functions as the defenders of big business interests.
Then there is the argument that we should not nationalise the industry as it is paying its way so handsomely. Our opponents must really disabuse their minds of the idea that our nationalisation programme is a sort of rescue service for semi-bankrupt private enterprises. It is nothing of the sort. Our policy is simply this, that where an industry is basic to the well-being of the nation and it is evident, after the fullest consideration of the merits of each particular case, that that industry cannot, while it remains in private hands, do all that the nation requires of it, but will be able to do so under public ownership, then we nationalise it, whether it is bankrupt or its coffers are bursting with profits.
Some other critics ask us to drop the Measure now and consider, if we are so determined, its reintroduction in a few years' time. Well, lye all know that it is the inevitable tactic of an Opposition, if it cannot defeat a Measure it dislikes. to demand that it should be postponed in the hope that in the passage of time a Government of another colour will be in control; in this case, a vain hope. But quite apart from the politics of it, it would, in our opinion, be folly to postpone nationalisation once the principle has been firmly accepted. That would mean leaving this industry in suspense for a considerable period, and nothing is more unsettling and damaging than that. Once a decision to change the structure of an industry is reached, in the interests of that industry, the decision should be implemented as soon as practicable.
There is this further point. The transfer of ownership we propose, will plainly be less disturbing if it takes place now, when trade is good, than in a period of world depression. We therefore believe we are acting prudently in the best interests both of the industry and the nation in proceeding with this Measure now. Anyhow, as I said before, with the world as it is, we cannot afford to


wait five or ten years before embarking on the steps necessary to make this industry efficient and responsive to national needs.
Another criticism that has been made about our proposals is that they would result in establishing too large and unwieldy an organisation, one which through its central control would be insufficiently flexible. First, as to size, The total output of the whole nationalised industry under the control of the Corporation will be half the present output of the United States Steel Corporation, and little more than that of the Bethlehem Steel Corporation and the Republic Steel Corporation. As for the fear that central control and integration would be damaging to the industry, I would like to read to the House an advertisement by the Bethlehem Steel Corporation which I happened to see in a recent issue of "Time" Magazine. What does the Corporation consider the best talking point to impress its potential customers? Presumably, this fact, printed in heavy type, which reads:
All Bethlehem production is centrally controlled.
Then it continues in rather smaller, but still bold type:
Bethlehem steel has a wide reputation for quality, uniformity and dependability—the result of unified direction of every step in manufacture from mining the ore to shipment of the finished product. Bethlehem, a Continent-wide concern with steel making units on both the East and West coast of the U.S.A. is a completely integrated organisation.
Those in the party opposite who are thinking, therefore, of arguing in subsequent speeches that we are doing something foolish or unbusinesslike by the integration which we propose here will, I hope, denounce with equal vigour the successful large-scale integrations in the iron and steel industry of the United States.

Mr. Martin Lindsay: Will the right hon. Gentleman tell the House whether that integration was done by business men or politicians?

Mr. Strauss: There is large-scale effective integration throughout all the realms of this concern which apparently works very well, and they are very proud of it.

Mr. Dodds-Parker: The right hon. Gentleman should remember that there is great competition, too.

Mr. Strauss: We do not suggest to the House that the passage of this Bill will, of itself, bring about spectacular improvements overnight. All it will do will be to establish the conditions under which alone the objectives we desire can be achieved. How far and how quickly success will come must depend primarily on the ability of the members of the Corporation, and the co-operation forthcoming from those who administer the affairs of the individual units. I know that most of the industry's leaders are at present opposed to the changes which the Bill contemplates. But this Bill will become an Act, and it is in their interest as well as the nation's that its detail should be as good as possible. We believe that the Bill as drafted is sound and workmanlike, but I will warmly welcome any suggestions within its present general framework which the men in the industry consider are likely to improve it. Those suggestions can be made either through their spokesmen on the Committee or by direct personal approach to me.
Let no one suppose because we are here building for the future rather than the present, and proceeding by evolutionary rather than revolutionary steps, that the proposals in this Bill are devoid of historic significance. This great reform removes from the private sector of our economy to the public the industry which is the citadel of British capitalism. It transfers to Parliament and the community that power to dominate the economic life of this country which now resides with the steelmasters in Steel House.
It will enable our steel industry, which through its key position could do so much to lessen the severity of trade depressions, to become an effective national instrument for planning full employment. It will offer greater security to those who work in it. It will enable our home consumers to get the steel they require at low cost. It will enable the Colonies to get the steel called for by their development plans. It will enable us to co-operate the better with the peoples of Europe in the revival of the industrial prosperity of that continent and the strengthening of its democratic foundations. It is for these great ends that we are asking Parliament to make Britain's iron and steel monopoly the servant rather than the master of the British people.

5.22 p.m.

Mr. Oliver Lyttelton: I beg to move, to leave out "now," and, at the end of the Question, to add "upon this day six months."
I have viewed this Bill with the gravest anxiety since I first saw it, and I am sure that the right hon. Gentleman who has just sat down will not mind if I say that, during the hour and twenty minutes during which he has been speaking, everything he said greatly deepened my anxiety. [Laughter.] Perhaps hon. Gentlemen opposite will be less inclined to laughter when I tell them the reason. It is because there is no plan of any kind whatever showing how this industry is going to be run when it is taken over under this Bill—no plan at all. We have had an hour and twenty minutes without any indication from the Minister of what that plan might be. The right hon. Gentleman gave us only a few cliches about the establishment of co-ordination machinery and the like. That is the main reason why my anxieties are far deeper than when I came here this afternoon.
At any rate, let us see whether there is any common ground upon which we can start, and I think there is. Steel is certainly a basic industry, and, as the right hon. Gentleman himself stated in one of those flashes of candour which sometimes peep through, if we add the State ownership of iron and steel to the State ownership of coal, the railways, gas and electricity, the private sector of industry—that was the right hon. Gentleman's phrase—now ceases to exist; it may be nominally 70 or 80 per cent. of the national economy, but, in reality, private enterprise will have ceased to exist effectively.
The whole apparatus of production will therefore be subject to the State, or be so dependent on the State for its common services and raw materials that it will not be able to turn loom or lathe, fire a furnace or launch a ship, except at the discretion of the State. [An HON. MEMBER: "Hear, hear,"] Exactly, that is the only object of this Bill—to pull down every form of private enterprise. I have been reading some remarks by the hon. Member for Broxtowe (Mr. Cocks), with whom I am very seldom in agreement, and who, speaking a week or two ago, said:
Once we have nationalised steel, we shall have broken the back"—

a happy phrase—
of capitalist control of industry in this country and its domination for ever.
It is just as well that we should agree as to what are the real objects of this Bill. The hon. Gentleman also said:
After that happens whatever party is in power, we shall be a Socialist State."—[OFFICIAL REPORT, 3rd Nov., 1948: Vol. 457, c. 925.]
This is the real stuff. Let us agree that, if the nationalisation of steel is carried out, a revolution, not evolution, will have taken place, and that revolution at the end of a Parliament. So, at least, we have a common point at which to start.
It has been Socialist practice, to which the right hon. Gentleman did not particularly lend himself, to hark back to conditions which time and facts have entirely altered. It is quite true that, in the late 'twenties and the early 'thirties, the steel industry was at a low ebb. It is quite true that unemployment was rife, but what was the main reason for that? What were the causes which brought about those heart-rending conditions? The main reason was that the industry had no tariff protection while its competitors had. The industry in the United States and Germany had impenetrable tariff barriers.
Secondly, the level of wages in some continental countries with depreciated currencies were at an intolerable level, and, in particular, large quantities of steel had been dumped in this country. I use that word advisedly. Early in 1932, the internal price of steel bars in Germany was 110 marks to the ton, while it was 90 marks to the ton in France and 50 marks was the price which German industry was prepared to accept for exports. Roughly, that was £2 10s. 0d. to £3, against a price of about £18 today for comparable material. Those were conditions which no industry by itself could hope to combat. The Government of the day, therefore, intervened to protect the industry with a tariff, and, at the same time, set up the Import Duties Advisory Committee to settle prices and supervise general policy and the development of the industry.
Thus, in 1932, an entirely new page had been turned and a complete change was brought about. Steel has been made under those new conditions for 16 years, and the issue today is not whether the steel industry met with fair or unfair


competition in the 'twenties or 'thirties, or whether it was then efficient or inefficient, but whether there is a case for nationalisation today, and I say that the Minister made out no semblance of a case. Before I leave the past, however, the only comment I want to make about the late 'twenties or early 'thirties is that a Socialist Government in 1929 was elected because of a promise given to cure unemployment. It is fair to say that unemployment was largely imported into this country from abroad. During the period of that Socialist Government, from 1929 to 1931, unemployment reached the highest average ever reached in our history, and the impartially-minded know that it was not the Zinoviev Letter or the Campbell case that brought that Government down, but their failure to remove the evil of unemployment.

Mr. Alpass: Mr. Alpass (Thornbury) rose—

Mr. Lyttelton: I am quite prepared at another time to engage in an academic discussion. I am sorry that it is distasteful to the hon. Member, and I will try to pass on to another subject.
Let me now turn to the case advanced by the Government for nationalisation, and I think I can follow the right hon. Gentleman fairly closely, Some of us remember statements made by the Lord President of the Council that the nationalisers have to be judged by the record of nationalised industries before they proceed to further nationalisation. Others will remember the statement he made on 28th May, 1946, in a steel debate:
It is, therefore, not, in its essence, a matter of party politics at all; it is, in its essence, a business matter,"—[OFFICIAL REPORT, 28th May, 1946; Vol. 423, c. 1105.]
I suggest that, looking no further than these two statements, the onus of proof is upon the Government. It is not a matter of politics, though it may be a matter of business. Therefore, the case for nationalisation must rest, first, upon an examination of the present output and efficiency of the industry; secondly, upon its capacity—I think these are correctly stated—to fill the national needs; and, thirdly, even if it answers these two tests, it must still provide everyone in the industry with an adequate reward for their services or labour, with a good standard of life, and with hopes for further improvement. I claim that the industry cannot be attacked upon any one of these three grounds.
The right hon. Gentleman never mentioned the subject of output, except in passing—a rather important thing when we are dealing with the steel industry. In 1932, the production of steel ingots in this country had fallen to about 5,250,000 tons; between 1932 and 1948 output has risen steadily year by year, with one or two minor setbacks, until it has reached the all-time record of 15,455,000 tons in October this year. Let me also be among those who acknowledge that that increase has been due, of course, to a great extent, to the longer working week which the operatives in the steel industry are working. But that, by itself, appears to me to be slightly irrelevant to the subject of nationalisation. The right hon. Gentleman took a large overdraft on his imagination when he described how, during the past year, the steel workers had worked so much harder and longer hours because the dawn of nationalisation could be seen coming over the horizon. The dawn is slightly smudged by events. So much for output.
I will turn to capacity. Quite frankly, I do not think that in the conditions of our general industry, an output of 15 million tons will prove, or has proved, sufficient. To meet the changed circumstances, the capacity of the industry is now planned to rise to 18 million tons. It is almost, if not quite, as damaging to our national economy to overdo or over-plan our steel making capacity as it is to under-plan it. I see that the Chancellor of the Exchequer agrees with me. One of the causes of the depression after 1918 was that there had been over expansion. In 1948, in a country where the Government are attempting to keep down capital expenditure to first needs, and in a country in which everyone knows that we have a shortage of labour, of houses, and of raw materials, it would be disastrous to build plants, to use up these precious hours and materials if, at the end, it was found that the sights had been put too high, and it turned out that these plants were redundant. Therefore, there must be a reasonable balance.
I do not think it is possible to make a very close estimate of what the planned capacity should be. Of course, it is only possible for people like Mr. Fienburgh, who talks of 22 or 23 million tons with all the certainty of ignorance, and that


charming writer of fiction Professor G. D. H. Cole, who, I think, has got the figure up to 26 million tons. It would be interesting to know if the official policy of the Labour Party accords with its official pamphleteers. I would hazard a guess that 18 million tons, to which the capacity is now to be raised—taking into account our dependence upon imported ore and scrap—will prove at least ample. That is my guess, and not without some study.
The first points I wish to make are that the record of output and the plans concerning capacity support no case whatever for nationalisation. What of efficiency? I wish to rebut here and now the suggestions made by the right hon. Gentleman regarding prices. In the majority of sizes and shapes, even if the subsidies were removed—and I ignore the freight subsidy, which I think is in a different category—I still say that the whole level of British steel prices will be competitive with the rest of the world, and, in some cases, considerably below. For example, I have here a table which shows that in the United Kingdom plates are selling at £18 16s. 6d. and in the United States at £22 16s. 11d. One may work the subsidies as one likes, but one cannot possibly make out, even without subsidies, that the prices will come together.
Of course, the right hon. Gentleman took a fanciful illustration and imagined the British industry, or somebody, running after a diminishing supply of scrap in some hypothetical Continental market. I wish to rebut what he said about steel prices, and I repeat that, even without subsidies, steel prices today will be strictly competitive. Therefore, I say that judging efficiency from prices, and accepting that even in the Socialist world that is not a bad way of doing it, there is no case for nationalisation if we are to take the Lord President's touchstone that this is a matter of business and not of party politics.
Lastly, having demonstrated that neither upon output, upon efficiency, nor upon capacity can any case for nationalisation be made out, let me turn to the position of the workers in the steel industry to which, in my opinion, the right hon. Gentleman did not pay enough attention. Everybody knows that there has been no serious strike in

the steel industry for 50 years. But I do not think that indirect statement is nearly enough. I must read to the House what Mr. John Brown, who was General Secretary of the Iron and Steel Confederation from 1937 to 1946, said in an article called "Steel Workers Fear Nationalisation." He said:
During the past decade an excellent sense of public spirit and national responsibility has developed which has resulted in complete co-operative effort throughout all ranks. Men are inspired to give of their best without fear of reduction in rates. Excellent machinery of negotiation, both local and national, for dealing with disputes has been developed over the years.
That was a retired trade official of great eminence. This article was replied to by Mr. Lincoln Evans, who holds the same position today. If his reply was intended to be a rebuttal of Mr. John Brown's article, I must say that to me, as an unrepentent Tory, it seems to be very half-hearted. This is what he said:
So, if the Confederation does not enter the controversy as hot-footed and eager as some would have it, and arraign the employers as totally unfitted to be entrusted with the destiny of a great industry, it is because there has grown up, apart from some isolated cases, a mutual respect, a tolerance and readiness to see both sides of the picture and to judge any issue, as far as it is humanly possible to do this, on its merits.
The main case for nationalisation which must, I assert, be founded on one of these main subjects—output, efficiency, capacity' or human relations—falls to the ground if it is a matter of business. There is no other aspect of the subject which shows more clearly that the object of this Bill is political.
I wish to refer to one other matter. Supposing—the hypothesis is demonstrably false—that the industry could be convicted of being under-equipped for its task, inefficient in its operation and to have had bad labour relations, I should like to ask the Minister what right we have to suppose that the present Government's record in other nationalised industries could give us any hope that nationalisation would put these things right? I say that the record of nationalised industries, up to date, whatever it may turn out to be in the future—I must be quite fair—has been a record of rising administrative costs, by which I mean an increased number of supervisory staff of all grades in relation to productive


workers, higher prices or worse service for the consumer, increasing losses for the community, and certainly no better human relations in the field of labour.
The Bill proposes to upset our most important industry at a critical time, and the Minister is as silent as the Bill upon how any reorganisation is going to be effected. I said "at a critical time," and I want to pick that point up to this extent. We ought never to forget that in 1922—four years after the first world war—we had a favourable balance of trade of £154 million, compared with the £260 million unfavourable balance of trade which is one of the main claims upon which the Chancellor of the Exchequer now rests. It is a very sobering fact. Socialists, when they find favourable figures, are very fond of comparing conditions in 1922 with those in 1948. Well, I just add that to the rest of their figures.

Mr. Ronald Mackay: Give us the figures of trade in 1922 so that we can make a proper comparison.

Mr. Lyttelton: I have not got them here at the moment. I was only making this point, that the situation of our balance of payments now is such as to justify the opinion that these are very critical times.

Mr. Mackay: Mr. Mackay rose—

Mr. Lyttelton: No, I will not give way again. I listened to the right hon. Gentleman for an hour and 25 minutes, and I must be allowed to make my own speech.
There is no case for nationalisation, and there never has been a case. The Minister has made out no case, and we must look for other reasons to explain the introduction of this Bill. The real reason is that the extremists in the Socialist Party wish for more power. Even when they put out one of those yellow-backed romances from the Socialist Grub Street, they call it "Steel is Power," and give the whole thing away. The case which the Socialists wish to make is that when power over a basic industry is concentrated into a mere 2,000 firms, into only a few hundred thousand shareholders who are described by the right hon. Gentleman as steel masters, and into a few, hundred boards of directors, this threatens the great body of the nation and consumers in particular. That is the argument.
To confess that the Government are powerless to see that in these conditions the national interests are not damaged, to confess that the Government are unable to prevent the community being exploited is to confess that the Government are incompetent to carry out one of their principal functions. Of course, the argument is a mere pretext. It is not at all that the Government fear that too much power has got into too few hands in the steel industry. What they really wish to do is to get power into still fewer hands. I see that all hon. Gentlemen opposite are nodding their heads. I congratulate them upon their rather ingenuous candour. It is wholly inconsistent at one and the same time to say that the Government are incompetent to protect the interests of the community unless they own an industry, and in the same breath to say that they are competent, with the aid of a few young gentlemen from Winchester and New College, to control from Whitehall all the various problems which press upon an industry, and which can only be solved by men of long experience and expert training.
This Bill casts aside any argument that the case for nationalisation rests upon either efficiency or even fear of the power of the few. It rests solely upon the appetite for power politics of this Government. This Government as it has been constituted—and it has a short life still in front of it, a very short life—wishes to collect all the power into its own hands in order that the whole of the genius, initiative and contrivance of our people may be chained and shackled permanently to the Government chariot.
I submit that I have shown that there is no case for nationalisation. The Government have, however, decided to nationalise the industry, and this Bill is the method by which they propose to do it. Right at the outset, the Government were faced by a deeply divided opinion in their own party and particularly in the Cabinet. I should guess that nearly half the Cabinet are, in their heart of hearts, at the best, very lukewarm about the Bill now. At any rate, not a great many of them have come to see this great revolutionary occasion which is culminating in the liberation of the people on 1st May, 1950. The dilemma which this division of opinion creates for the


Government is written all over the face of the Bill.
It is because of this division of opinion that the Bill adopts an entirely novel form of nationalisation. It creates a holding company to own and hold all the shares of the principal steel concerns, and at the same time keeps alive, at least until they can be got round to, each and all of the steel companies and the boards, the fees, the articles of association and the subsidiaries. The Bill keeps them all alive. The purpose of this creaking piece of machinery is to enable the Prime Minister to say to awkward Left Wing extremists, like the Minister of Health, "My dear fellow, do not worry. We have bought the 107 principal steel companies and we have got all the shares. If this is not nationalisation, what is?"
On the other hand, they hope to quiet the anxieties and still the criticisms of people like the hon. Members for Keighley (Mr. Ivor Thomas) and East Middlesbrough (Mr. A. Edwards) by saying to them, "Do not worry. Although we own the steel shares, we are not going to manage the companies. We are going to leave that to other people. If you, as a good Socialist, have a few steel directorships"—and many of them have—"you need not worry. You will be allowed to manage your own business even if your recent record has been a little dismal." I always thought that one of the objects of government, and indeed of good sense, is to try as far as possible to marry ownership with responsibility. Yet in this Bill, from the necessities of party politics, the Government are trying to discard this principle over steel. They want ownership, but the responsibility for managing it is to be left to others, subject always of course in these great constructive Measures to the fact that the Minister is going to set up proper co-ordinating machinery.
Another reason why this facade is preserved is because the products of these companies, particularly for exports, are sold largely upon their names, and their names are famous throughout the world. It is a piece of prestige which has been built up from the early days of steel making, and never lost. It is almost impossible to think of constructional steel without thinking of the names of Dorman Long and Redpath Brown. Would such

a ready market be found, particularly in the export field, if in future constructional steel was to be called "Strauss's structural steel"? I rather doubt it. Of course, the reason why these steels have a great market is because they are known to be produced by Dorman Long and Redpath Brown, and not Dorman Long and Redpath Brown diluted with a number of people who, as the Minister said, had never been selected for any responsible position before this Bill was introduced.
Having decided to proceed with nationalisation, the next dilemma was, "How far shall we nationalise; where shall we stop?" At the outset, I would hazard a guess, they decided to nationalise up to the steel billet—to cut off some part of the process of steel making at the steel billet. The Government's advisers had to tell them that that would not do at all; it simply could not be administered. Of course, in a White Paper about nationalisation down to the steel billet the neatest line could be drawn, and it is such a simple scheme that the Socialist Party could understand it. It was so moderate that it would justify a sedative speech from the Lord President. It was so gentle that even the Lord Chancellor could spend an undisturbed night in the Lord Chancellor's lodgings—undisturbed by the promptings of a conscience which has always been uneasy and which recently has been positively unmanageable.
But, however neat it might appear in the White Paper to nationalise steel down to the steel billet, it is quite impracticable. That can best be shown by an illustration. Within the ringed fence, to put it that way, of the Stewart and Lloyds' undertaking at Corby, there is comprised the whole of one complete part of steel making. Iron ore is mined, pig iron is produced, steel is produced from the pig iron, steel is rolled and, eventually, steel tubes are manufactured. If steel were nationalised down to the billet, a partition would have to be erected in Stewart and Lloyds' works, one side of which would be marked with the broad arrow, meaning it was Government property, and the other side of which would have the monogram of Stewart and Lloyds', showing it was private enterprise. Having erected a


partition, I suppose the Foreign Office would come down and attempt to negotiate a Customs union between the two halves of Stewart and Lloyds'.
The Government have been talked out of this solution but, unfortunately, waiting for them on the other side of the question was another dilemma, even more embarrassing, because if a solution is sought by acquiring the shares of all the companies which are integrated then the Government are right down into hundreds of other industries, as the right hon. Gentleman confessed. That is the principle they have adopted. One hundred and seven of these principal companies are to be acquired. They turn steel into innumerable manufactured or semi-manufactured products. I have a list of them here, but the House will realise why I do not wish to read it out. These are main products and the manufacture ramifies into almost every crevice of British industry. It goes into the chemical trade—which is apparently agreeable to some hon. Members opposite—into the production of sulphuric acid, sulphate of ammonia and creosote. It goes into the electrical industry, in the manufacture of welding equipment; into structural steel, in the manufacture of things like the Sydney Bridge; it goes into the railway equipment industry, in the manufacture of axles, tyres and wheels for rolling stock. It ramifies in every direction and finally, of course, it gets into the miscellaneous industries where we find that the Government will be engaged in making umbrella frames and florists' wire.
Let me, at this point, give one instance, and I might say that the right hon. Gentleman carefully steered away from the particular throughout his speech. This is the case of the English Steel Corporation, which is a wholly-owned subsidiary of Vickers. English Steel is to be nationalised. Its production is about 420,000 tons of ingot steel, and over 300,000 tons of this is processed and turned into finished products, including finished machinery, by the parent company. Here is an instance where there will be complete disorganisation in the closely knit relations between the parent and its child. Another wholly-owned subsidiary of Vickers is Darlington Forge. It is to be nationalised. Its forge is the

counterpart to that of Somers at Halesowen, Denyston Forge, Fife Forge, Sunderland Forge and others, none of which is an ingot maker and none of which will be nationalised. The reason Darlington Forge is to be nationalised is because it happens to be the wholly-owned subsidiary of a company whose output of ingot tons qualifies it for inclusion in the scheme, and which is not, to use a phrase of the right hon. Gentleman, a candidate for expulsion—a phrase used by the right hon. Gentleman, thinking back to his private-school days.
In many other activities the companies to be nationalised represent only a small percentage of the total production. I think the right hon. Gentleman gave some figures, as if they mitigated the offence. Of course, they make it infinitely worse. Some of the production will be quite small. Sometimes 80 or even more than 90 per cent. will be manufactured by so-called private firms. Their shareholders are taxpayers and, may I remind the Government, also voters? May I remind the Government of that? They will find themselves in competition with the nationalised firms which they themselves will be obliged to subsidise on occasions out of their own pockets, via the Exchequer. And it is much worse than this, and this, of course, the right hon. Gentleman suppresses altogether.
Not only are they in competition with firms which, I say, will often have to be subsidised by the taxpayers' money, but they are at the same time dependent for all their raw material upon the nationalised companies. They are bound hand and foot, and when demand falls below production, or when production is higher than demand, whose production will be trimmed? Will it be that of the nationalised industry or the private industry? I shall give the House an answer and I shall give it from the Bill itself. Of course, it will be the private sector who will have their production trimmed, and this is all borne out by Clause 29, which is so amusing that I will read it to the House.
It shall be the duty of the Corporation so to exercise and perform their functions under this Act as to secure that the combined revenues of the Corporation and all the publicly-owned companies taken together are not less than sufficient to meet their combined outgoings properly chargeable to revenue account, taking one year with another.


I am going to ask the shareholders of my company to incorporate that in the articles of association, and, afterwards, I shall take a long holiday. This is the Clause which will be invoked when the Government withdraw the allocation of steel from the private companies while retaining, uncut, the allocation of steel for the nationalised companies. This is the Clause, and they will say, "We have to do this because it is a statutory obligation for us not to make a loss. You have no such statutory obligation, so you get no steel because your competition is awkward for the nationalised companies." His Majesty's Government must not be "in the red." At least, not in steel. In civil aviation it is different, of course. But not in steel.
At the end of it all we find the taxpayer competing with concerns which are to be subsidised and helped with his own money. In all this, we see, in small, the canker which is at the root of Socialism as it is preached by the present Government. Of course, the Minister of Health does not like this milk and water variety of Socialism at all, nor do a few hon. Gentlemen and hon. Ladies opposite. They would like a much stronger brew. They want the State to take everything and, although this would have the temporary disadvantage of entirely cancelling all personal liberty, it would, at least, provide a convenient answer to the sort of dilemmas I have posed to the Government this afternoon.
The bottom end of the demarcation between private enterprise and the Government will look like the chart of a man with delirium tremens—no one will be able to tell which way it is going. What cannot work is Socialism on the present model, which purports to allow 80 per cent. of industry to be managed privately, but at the same time sets up a system under which the Government will compete with the taxpayer with the taxpayers' own money. The final irony at the end of the day is that the Government are going to supply all its competitors with steel whilst at the same time retaining the statutory obligation never to make a loss themselves.
I propose to say nothing about compensation. My right hon. Friend the Member for the Scottish Universities (Sir J. Anderson) will speak about that to-

morrow. Most of the arguments have been so well put, only in the opposite way round, by the Minister that I think my right hon. Friend will have an easy task. The Government have artificially depressed the shares and have relied on the co-operation of the industry not to increase its dividends and then bought the shares at the rigged market price. I consider the Government should consider altering the title of the Bill to the Iron and Steal Bill. So much for compensation.
I turn now to the last main question at issue. It concerns the location of plants. Of course, an industrialist who moves a plant from South Wales to Lincolnshire or Northamptonshire, because a saving of so many pence or shillings per ton can be made, and does this without taking proper account of all the human factors involved, and cancels out the so-called social capital invested, commits a grave error. Industry is, after all, concerned first with human beings, and only afterwards with things—materials, processes, costs. On the other hand, if an industrialist accepts a location for his plant because he has been long-established there, and remains long after the local iron ore has been exhausted, for instance, and has to accept a far higher cost than would keep him in a competitive condition, then he commits also a grave error. Economic retribution in that second case will surely visit him and all who work for him. Socialists, however, want to have the best of both arguments on all occasions. To them a company which moves a plant to a new location is always a juggernaut. On the other hand, if it accepts some increase in cost by remaining in the previous location, the Socialists always say it is bowing down to vested interests.
It is only people who know very little about the industry who really believe that the question of location can be settled by the application of some rule of thumb. It is one of the most critical problems that face an industrialist. The Government will remember that I introduced a Bill myself in the House—it was largely the work of the present Chancellor of the Duchy of Lancaster—about the location of industry; and the Government already possess very wide powers over location of industry. Whether or not that is so, it is really rather beside the point,


because I claim that no major plant in any industry, and certainly not in the steel industry, has been placed in a location since the war without the Government's approval. I should like to know whether the Government wish to challenge that fact.
Of course, in the case of steel, the argument is still more academic, because the location of plants in the development programme of the industry has been approved by the Government for five to seven years ahead. The Lord President, on 28th May, 1946, used these words:
Let us understand what this Report does. It is a valuable Report. Neither I nor my right hon. Friend fundamentally quarrel with it. We cannot be committed to every detail of it, but, it is an able and valuable contribution to the discussion of this problem."— [OFFCICAL REPORT, 28th May, 1946; Vol. 423, c. 1108.]
No responsible Labour Minister has ever challenged the essential soundness of the development scheme. Therefore, the last argument for nationalisation—that plants may not be located in places which are not the best from the social point of view—falls to the ground.
There remain one or two other pieces of Socialist propaganda which, before I sit down, I should like to wipe up. For example, the hon. Member for Reading (Mr. Mikardo) committed himself in the "Tribune"—my favourite reading after "Punch"—on 13th August, 1948, to this statement:
It was only the Labour victory of 1945 which induced the industry, in blind panic, to produce its plans for reform. The first of these plans was drawn up, with an almost indecent haste which gave the game away in August, 1945.
These statements are, of course, entirely false, and they have been refuted in other places. The development plan was asked for by the Coalition Government in May, 1945, and the industry was given six months to prepare its plans, and presented its plans absolutely punctually in December, 1945. It could only do that because it had been working on the main features of the plans since 1944. No responsible Minister has ever denied the general soundness of this plan.
Lastly, it is claimed, and was claimed only last week in the Socialist Press, that the development scheme involves sums too large for private resources, and that only the Government can finance the

scheme. I have no doubt the hon. Gentleman really believes that, and that he has been taken in by propaganda. Altogether £200 million is involved. Of this £50 million has already been raised. That leaves £150 million, of which, in broad lines, the industry has £100 million. That leaves £50 million to he raised from the market over a great number of companies in five to seven years. Double that sum is nothing at all over this period to the market. If hon. Members want proof, here is evidence. In 1948 two companies were both appealing for money in the same year, the Shell Company and I.C.I. The amount of £60 million was subscribed—that is to two companies in the same year. Yet we are asked the believe that the market cannot produce £50 million over seven years.

Mr. Mitchison: Would the right hon. Gentleman tell us what happened to the Steel Company of Wales?

Mr. Lyttelton: It raised £50 million, of which £15 million was raised at 3 per cent. on first debentures. After the Chancellor of the Exchequer had imposed his tax of 2 per cent., the 3 per cent. fell by two points. The remaining £35 million was put up by a private enterprise company, the Industrial Finance Corporation.

Mr. Jenkins: Mr. Jenkins (Southwark, Central) rose——

Mr. Lyttelton: No, I have not time to give way again. And really, hon. Members ought not to interrupt on these matters of fact.
I wish, in conclusion, to touch the policy of the Conservative Party towards the iron and steel industry. It was this party, and my right hon. Friend the Member for West Bristol (Mr. Stanley), when he was President of the Board of Trade, who devised the system of setting up the Import Duties Advisory Committee to supervise the price lists and the general policy of the industry. On the one hand, we believe that the industry must have the benefit of a massive central organisation. On the other, we think that a great basic industry like the steel industry, employing a large number of men, and considering the widespread use of steel in other industries, and the power of the steel industry to contribute to our exports, is so important that it should have Government supervision.
We do not believe that it would be right, where such large and vital interests are concerned, to permit competition to play over the steel industry without any Government interference or without Government approval. As a party, we believe that private enterprise with lively personal initiative should be the foundation of our national and industrial life. We believe that the true solution of a problem which faces us again in this century lies in a combination by which the industry owns and manages its own affairs, by which the skill of the steelmaker, both manager and worker—and I claim there is no higher in the world—is expressed, in the first instance, through his loyalty to the famous companies who have built up their names in steel all over the world. The right hon. Gentleman's argument that because someone works in the first instance for a company that is a divided loyalty is quite ridiculous. We might as well say that someone who serves in the Grenadier Guards cannot appreciate the national interest.
But we believe that the prices charged by the industry should be subject to Government supervision and approval. The idea that the industry is able to throw dust in the eyes of the Government in matters of prices is too ridiculous to require examination. The Minister of Supply has a large staff who are engaged in nothing else than seeing that the prices charged are no more than those required to give an adequate return to efficient producers.
The case for nationalisation will be shattered in the course of this three days' Debate. The Government are bringing forward this Bill for far deeper reasons and for far longer objects than those which appear on the surface. They believe in the centralisation of power in the hands of the State, and they regard this as a major move towards that end. I would remind them that the totalitarian countries also believe in the centring of power in the hands of the Government, and it is towards this type of Government that wittingly or unwittingly this Bill is directed.
We believe as Conservatives that the Government must act impartially for every section of the population. We believe that the Government have to weigh in the balance the interests of the

agricultural and the industrial community. We do not believe that they can do so if they are themselves industrialists and engaged in the day to day management of industries on this scale. It has long been our doctrine that in a democracy power should be dispersed; that the Government should govern and supervise and not own and manage. We shall oppose this Bill in all its stages in this House by all the means in our power, and one day, and not far off, the people will decide.

6.14 p.m.

Mr. S. N. Evans: It is not inappropriate that I should catch your eye, Mr. Speaker, after the right hon. Member for Aldershot (Mr. Lyttelton), because, like him, I am what is known as a business man, though he operates at a more rarified and affluent level than I do. Before I turn to the arguments of the right hon. Gentleman, I should like to make a point in another connection which is strictly relevant.
There has been a lot of Press comment about this Measure, and one in particular struck me very forcibly. I have always been a great admirer of the "Economist," a journal which is frequently quoted in this House. Recently, however, I have wondered whether the enervating atmospherics of Bournemouth were not beginning to obtrude, particularly after reading the front page article on 6th November which stated:
The Americans have not concealed their dislike of the project of nationalising the steel industry. It is surely only common prudence not to do anything which may compromise the future prospects of the Marshall Plan.
The "Economist" is widely read in the United States, so out of the privilege which an old and well-tried friendship recently cemented on the battlefield mutually confers, I would say that we are very grateful to the American people for their tangible recognition of the fact that the part played by Britain in the recent war against totalitarianism was out of all proportion to her strength. We recognise that without the aid now crossing the Atlantic the effort to regain our sea legs would be both prolonged and arduous. For that unique combination of altruism and enlightened self-interest—the Marshall plan—we are profoundly grateful. There are certain things, however, that neither this House nor the British people will stomach even though


they be reduced to bread and water—one is General Franco and the other is any interference with our domestic affairs.
The right hon. Member for Aldershot and I meet the same sort of people. We are the business men. We, as a nation, owe a great deal to the business community. I know of men working 10 to 12 hours a day trying to get this old country back on to its feet. Often with these people the desire is more to achieve than to acquire, and I repeat that this nation owes them a debt of gratitude. But they tend to have single-track minds. The right hon. Member for Aldershot may confirm that. They tend to think rather in terms of their own day and age and are unable to see things in their correct historical perspective. They act as though history were static, but it is not static; it is dynamic; and just as we get chemical changes in nature—new birth with the spring, the gradual building up of strength during the summer, fruition in the autumn, and winter disintregation—so it is with social and economic systems. Change is both necessary and inevitable and we ought to consider this matter in its correct historical aspect, because only thus can we truly appraise the merits or demerits of the Measure now before the House.
There was a time when we had a feudal system, when men had to work for the lord of the manor a couple of days a week and fight in his army as required. Then came the mercantile period—the birth of Elizabethan greatness when Drake, Frobisher, Morgan and the romantic Raleigh—which laid the foundations of British affluence and prosperity. The industrial revolution brought the capitalist system—this system of so-called private enterprise which, in many of its aspects, has been neither private nor enterprising for many years.
The mechanism of the market test of efficiency in capitalist economics has long since been abandoned, particularly in the steel industry. Instead, we have had cartels, price fixing and quotas, and these have bolstered inefficiency and stifled enterprise. I do not think anyone can deny that. Now, whether we like it or not, we are passing to a collectivist system. These economic and social trends are like a river going down to the sea: they can be dammed; they can be diverted; but eventually they

get there. The real question that remains to be answered is whether the transitional period between finance capitalism and collectivism is to be long and comparatively painless, or short and sanguinary. I am bound to say that this will depend very largely on the good sense and patriotism of those who at the end of the present Parliament will still own 85 per cent. of the means of production in this country.
We are accused of being doctrinaire in connection with this Measure. Now, I think it is about time the Government set up a panel of professors to examine the English language and its mid-twentieth century usage, for certain words seem completely to have lost their meaning since I was a boy. "Democracy"—God rest the soul of Abraham Lincoln—is one, and "doctrinaire" is another. I understand that the word "doctrinaire" was originally applied to a body of Frenchmen who wanted to modify the French Constitution and to write it on English lines. Looking across the English Channel at this moment, some may think it a pity they did not succeed. But what is discreditable about being doctrinaire? Down the centuries every religious body and political party has had a philosophy; and to serve that philosophy it has had a doctrine. A doctrine, I would say, was the catechism of a philosophy. The House will recall that the rising industrial class of the eighteenth and nineteenth centuries rose to power with a spanner in one hand and the laisser-faire textbook of John Stuart Mill in the other: everybody for himself and the Devil take the hindmost. Was that not a doctrine? Of course it was.
However, the spiritual descendants of John Stuart Mill seem now to be in something of a dilemma. They are strangely divided. The Leader of the Opposition says, "Set the people free," whereas the right hon. Member for Aldershot, speaking in Birmingham on 10th November, had this to say:
The Unionist Party would accept a certain amount of Government supervision for the iron and steel industry provided that it stopped short of ownership.
Sir Ellis Hunter, the President of the Iron and Steel Federation, said much the same thing in a statement last Wednesday. For the life of me, I cannot understand the process of reasoning


at work. I ask the House: how can a Government body incompetent to supervise an industry be competent to administer it, or vice versa? If—and this is what is said—a Government body cannot be found competent to administer this industry, then how can such a body be found competent to supervise it? Yet there is no objection to supervision. Sir Ellis Hunter went on to say that in future the Government would itself be an interested party, controlling the price and volume of the raw materials supplies of its competitors in the finishing branches. Nobody denies that. But that is precisely the function exercised by the Iron and Steel Federation at this moment. If the Iron and Steel Federation can do that on behalf of its members, why not the Government on behalf of the country as a whole?
Let me refresh the memory of the House with some examples of how this operates at the moment under the Iron and Steel Federation. There was the instance of the Brabazon aircraft erection factory. Tenders were invited for the steel work; two firms wrote and said they could not handle it and were not interested—although they said they would be prepared to help anybody that could; five firms quoted precisely the same figure.

Mr. Erroll: Why not?

Mr. Evans: Well, is this private enterprise, competition, the life blood of industry? Is it?

Sir Andrew Duncan: Are the five firms of whom the hon. Gentleman speaks included in this Bill?

Mr. Evans: Yes. I shall have to check the names to make quite certain, but I think I could risk saying "Yes." Certainly the biggest of them is.

Mr. Orr-Ewing: Yes, but was it a fair price? The hon. Gentleman is saying that so many firms quoted the same price, but whether or not it was a fair price is rather relevant.

Mr. Evans: How could it be a fair price? At least one of the quotations had to bear freight charges of from £1 to 30s. in excess of another firm's quotation. Surely that should have been

reflected in the price quoted—especially having regard to the very large tonnage of steel involved.
Earlier this year I received from the joint works council of a Darlaston nut and bolt manufacturer a plea to intervene on a matter of steel supplies. I made the opening moves with some tact, if I may say so, being concerned principally to help my constituents in the steel industry and not to make political capital by hitting the headlines. In the course of the negotiations—if that is the word—three facts emerged: first, that costly machines—some of them costing £25,000 apiece—were working to only 29 per cent. of their capacity, due to shortage of raw material; secondly, that the organisation which owned the idle machines was dependent on its largest and most formidable competitor for a substantial proportion of that essential raw material, without which it could not go to work; and thirdly, that supplies to the Black Country from the North-East Coast had been substantially cut, because the steel makers on the North-East Coast could get £1 or 25s. a ton more by selling their steel on the doorstep owing to the saving in freight charges. That is to say, they saved £1 or 25s. a ton.

Sir A. Duncan: I am sure that the hon. Member is not suggesting any breach of the allocations, as this concerns the system of allocations?

Mr. Evans: What I am saying is that a member of an organisation affiliated to the Iron and Steel Federation conveyed the information that the North-East Coast producers of steel were denying supplies to the Black Country because, by selling on their own doorstep, they could save £1 or 25s. a ton on carriage.
The House may also recall the experience of a London firm of engineers who invited tenders for 25 ton steel castings required in the manufacture of forging equipment. There was a £1¼ million order from the Russians in the offing, and they were inviting tenders for those parts of the equipment which they did not themselves manufacture. A Scottish firm quoted £134 a ton and an English firm £95 per ton. The Americans quoted £62 a ton, but that is immaterial for the moment. The Iron and Steel Federation stepped in, the English firm was told to


step out, and the firm requiring the castings was told that the only source of supply now open to them was the Scottish firm, which is the firm that quoted the highest figure of £134 a ton. And so, they had either to take the castings from that source, or use scarce dollars to buy in the United States. Following my reference to this in the House of Commons, the chairman and managing director of the engineering firm concerned sent me this telegram:
Just received news that standing committee British Iron and Steel Federation has passed a minute that every price for steel quoted to us must be submitted to headquarters first.

Sir A. Duncan: Is the hon. Member aware that steel castings are not covered by this Bill, and also that the Steel Casting Association is not a member of the Iron and Steel Federation?

Mr. Evans: Is the right hon. Gentleman so naïve as to think that this House is not aware of the fact that several of the concerns affected by this Bill make castings of the type about which I am speaking? Here is the anachronism of an industry, vital to the wellbeing of every person and to the integrity of the State, being in control of a small body of men responsible only to the financial interest they serve, and constituting, as the "Manchester Guardian" once said,
one of the greatest sources of private political power in modern society.
No Labour Government concerned about its future can possibly afford not to nationalise iron and steel.

Mr. W. Fletcher: Did the hon. Member say concerned about "its" future, or future of the country?

Mr. Evans: The two are synonymous I want to turn to another matter referred to by the right hon. Gentleman the Member for Aldershot. He spoke of the Steel Corporation of Wales. I was down there recently at the invitation of one of the biggest units in the industry. and they treated me very hospitably and showed me everything I wanted to see. They did not answer all the questions I asked, but that, of course, was understandable. I had some very important and illuminating conversations, and out of them emerged this fact, that this modernisation and development scheme in South Wales is very likely going to

cost £70 million, and I was told that there would be a depreciation charge of £7 a ton on the products of this gigantic undertaking. I want to ask the right hon. Gentleman this question. Does he think it possible, in the case of a commodity which the Americans were offering for £14 5s., that is, carriage, insurance, and freight paid, Tilbury, 1939—I am referring to sheet-metal for motor car bodies—to have a depreciation charge of £7 a ton as an overhead charge?

Mr. Lyttelton: Since the hon. Member has asked me a question, perhaps I may ask him one. Is he, then, against the spending of these large sums of money on modernising the industry or not?

Mr. Evans: No, I am not. If in a period of a buyer's market, to which Members opposite are often referring, this commodity which sold at £14 5s. prewar has to bear this depreciation charge of £7 per ton, what will be the position? Will it not be that the State will be required to write off a substantial part of the cost to the consumer? The alternative is an addition to the £22 million subsidy already being paid to the industry.

Mr. Orr-Ewing: I am sure that the hon. Member does not wish to mislead the House. Will he tell the House exactly how he arrives at the figure of £22 million?

Mr. Evans: I have not got the details, but they were given in HANSARD in reply to a Question in July. I apologise for not having the details with me, but they are easily ascertainable.

Mr. Orr-Ewing: When a statement of that sort is made, it is only right that the Member——

The Parliament Secretary to the Ministry of Transport (Mr. James Callaghan): Read it in HANSARD.

Mr. Orr-Ewing: The Parliamentary Secretary should not interrupt me while I am interrupting one of his hon. Friends by permission. There are various ways of arriving at the total, but it is my belief that the hon. Member is including one figure by mistake which is not by any means a subsidy to the steel industry but happens to be a subsidy on imported steel. Perhaps he can give us these facts. If


I am right, I think the figure he has to consider is something in the neighbourhood of £9 million.

Mr. Evans: I apologise for not having the details at the moment, but perhaps someone on these benches will remedy that. I understand that there are about 190 firms which are at present engaged on tin plate manufacture. The technical efficiency of this new plant is bound to make many small units redundant and this, in turn, will create a social problem of great magnitude. I want to know whether the owners of the iron and steel industry, suppose it were left in their hands, would assume responsibility for the social obligations which will come about as a result of whole villages being put to sleep by the technical and competitive forces of this new plant? We must take such matters as these into account as well as the technical aspects of steel nationalisation.
Thanks to the kindness of one of my colleagues I have just had handed to me the information which the hon. Member for Weston-super-Mare asked for a few moments ago. It is as follows: Payments to the industry in respect of imports of steel, £8,600,000; pig iron, £345,000; scrap, £4,800,000; contribution towards freight of imported iron ore, £7,300,000; subsidy in respect of production of home ores, £700,000, Total £21,745,000.

Mr. Lyttelton: I think the hon. Gentleman is misinformed about the first figure which he has given us. Payments are not made to the steel making companies; they are made to steel users, which is quite a different thing.

Mr. Evans: Steel makers are often steel users, and we could have a lively argument about that.
In the interests of the State it is essential that this industry should now be brought to the highest possible pitch of technical efficiency. It is also no less important that the fruits of this efficiency should accrue to the many industries for which steel is the basic raw material. This island has many advantages in the matter of steel making. We have coal in plenty, iron ore—true, not of very good quality—ports, the second largest market for steel in the world, and a skilled and amenable labour force at wages distinctly lower than those obtain-

ing in America. Steel makers have had great advantages.
I suggest that a purely technical plan should now be drawn up for the geographical regrouping of the industry. The technicians who work out such a plan, following the provisions of this Bill, will be able to ignore all questions of ownership and think solely in terms of mills and furnaces, which they have not been able to do under the edict of the Iron and Steel Federation. The Federation's proposals have been nothing more than the maximum compromise found possible between the large units which make up the industry. This has led to undesirable plans, and I will quote one which is outstanding. The astonishing decision to site blast furnaces at Shotton, the headquarters of the Summers Group, and import iron ore from Birkenhead, necessitating a 20 mile overland haul, is striking proof of the degree to which the Federation's reconstruction proposals have been shaped by vested interests.
I have said before, but it will not hurt for saying again, that to replan the reconstruction of the City of London in the knowledge that St. Paul's, the Tower, the principal railway stations, the Thames bridges and the Houses of Parliament were to stay as they are, is one thing; given a virgin site, something totally different might emerge. That is precisely what the proposals now before the House will do: they will remove the barbed wire of sectional interests, and enable a totally different approach to become possible.
Since the palmy days of Greek mythology there has been no such sedulously spread myth as that the owners of the industry are hairy-chested sons of steel, weaned at the ladle. The old-time capitalist who worked at the plant is extinct. What we have now are not capitalists but finance capitalists, operating by means of remote control through directors who obtain their results from managers and technicians. More and more, ownership and control of British industry are passing into the hands of comptometer champions from Holborn Bars. Very soon we shall all be working for the Prudential Assurance Company. I am told that 75 per cent. of the fixed interest bearing stocks in the steel industry are owned today by insurance companies.
A word or two about compensation. When the nation's war leader, the right hon. Gentleman the Member for Woodford (Mr. Churchill), made his great speech in June, 1940, in which he said:
… we shall fight on the seas and oceans … we shall fight on the beaches, … we shall fight … in the streets, we shall fight in the hills; we shall never surrender.…—[OFFICIAL REPORT, 2nd June, 1940; Vol. 361. c. 796.]
he did not mean that we were fighting only for the rentiers. This compensation has to come in the ultimate from the worker, from his production and from the pennies he pays in taxation on his ale and tobacco. The Government do well to be careful to ensure that the basis of compensation is equitable. I have been looking at some figures, and while I have no wish to try your patience, Mr. Speaker, I should like to put one or two of them to the House. In December, 1936, Colville's gross profits were £658,638. In December, 1947, the figure was £990,891. Take another company, Consett Iron Coy., Ltd. Their profit for the year ended 31st March, 1936, was £519,626, while their profit for the year ended 31st March, 1947, was £1,196,809, more than twice as much. As a final example we will take the Lancashire Steel Corporation. Their profits for the year ending 31st March, 1936, were £548,204, and at the 31st December, 1947, their profit was £1,562,468. The claim to compensation on the basis of earnings only made possible by the recent struggle for survival in which Britain was engaged, by the ravages occasioned by that struggle, and on earnings at a time when there is a complete cessation of German competition is in my view the height of immoral effrontery.
I am coming to the end of my argument, but I should like to return to the Birmingham speech of the right hon. Gentleman. He said that this Bill was a great moment in the struggle of two ideas. He is quite right. It is the crucial struggle between two ideas which are being fought out all over the world. It is quite impossible to consider objectively this problem of iron and steel nationalisation, without viewing it in the political and economic background peculiar to our day and age. Some may feel that the question of the public ownership of iron and steel should be considered in a vacuum, but this cannot be. A nation's problem and the

measures projected for the solution of those problems collectively constitute a diamond of many facets. Berlin, one oz. of bacon, Western Union, Dominion and Colonial development, output per man-shift are the stuff of politics today and no one facet can be judged except in relation to the others.
At a time when social democracy can only extend its influence by representing to the world a virile, practical alternative to the bread and serfdom concepts of the authoritarian police States, a betrayal by the British Labour Government of the philosophy which gave it birth would have had catastrophic psychological effects not only in this country, but throughout Europe. Britain has always been a laboratory of social experiment. Today we are engaged in the greatest experiment of all time—one to abolish want without at the same time abolishing liberty. The experiment now going on is, in my view, the most significant and promising European social event since the great French Revolution of 1789. By the passing of the Measure now under consideration, the revolution by consent will gain added impetus. By these and similar Measures and conscious of our responsibilities as trustees for a thousand years of history, we are laying the foundation of that more equalitarian Britain which will alone make recent sacrifices worth while.

6.55 p.m.

Viscount Hinchingbrooke: On one or two occasions I have heard the hon. Member for Wednesbury (Mr. S. N. Evans) make a witty and succinct speech. I regret to have to say it that I found his speech today—I hope he will forgive me for saying it—a little sententious and rather out of line with the spirit which ought to infuse the Labour Party on this of all days, when they are presenting one of their major nationalisation Measures. We thought that speeches of hon. Members would be in more light-hearted and amusing vein, but it may well be the case that the iron of Edmonton has entered into the soul of the party opposite as well as into the Bill. The hon. Gentleman picked on a number of foibles and troubles in the Iron and Steel Federation. I can assure him that ten times the number of foibles and troubles are come across every day in the nationalised


institutions of this country at the present moment. We have examples of them in the House all the time, and if the hon. Member thinks that the kind of thing which he cited about the Iron and Steel Federation will be overcome and cured by nationalisation, then he had better think again.
The hon. Gentleman continued on the same lines as the Minister—that very drastic alterations were needed in steel and that somehow a super-efficiency would be achieved. All this Bill does is to remove the shareholders and financiers—I shall come to that in a moment—and substitute the Minister and the hierarchy of the Civil Service. Do not let the hon. Gentleman imagine that super-efficiency in steel is going to be got through that very simple device. The greater part of the management is left and the companies will exist, at any rate for a time, as they are now. If there is increased efficiency in steel at all, it will come about by the steady application of tried methods carried out by responsible and experienced people in the industry and not by any kind of facial transfiguration as embodied in this Bill.
The Minister delighted us on this side of the House with a speech of great inconsequence. I did not observe any solid line of defence except on the question of compensation, on which my right hon. Friend the Member for the Scottish Universities (Sir J. Anderson) will faithfully bring him to book tomorrow. The rest of his speech was a kind of starry-eyed idealism which amused all of us on this side, as it must have embarrassed hon. Gentlemen behind him. I discerned from their quick and strident cheers an acute nervousness on the whole of the proceedings today.
The Minister killed the first part of his speech with the second part. The first part played up the great idea of unification of steel, and then came the division. In the second part he praised separatism up to the skies and showed the advantages of leaving the companies as they are, each contending against the other. I think it can be said that the Minister's remarks upon that subject were unconvincing. He pointed to rows having taken place between the Government and the industry but no examples were given. It was rather like the fable of the wolf

and the little pigs. The wolf prowls round the house and threatens the little pigs, who squeal in reply. The wolf then blows the house down and eats the little pigs. The Minister invents rows between the managements and the Government as an excuse for swallowing them up in nationalisation.
The Minister went on to complain about the price structure of steel. Again, he made no suggestion as to how nationalisation would reduce that price structure. If coal, gas and electricity are any comparison, the price of steel will rise rather than fall. The Minister then came on to the most serious and malicious part of his speech, when he threatened managements if in the course of the next few months they in any way or even inadvertently dissipated their assets through not recognising what the Bill itself now means to do. The Minister admitted that the Bill left certain loopholes, and he then threatened managements with what would happen if they tried to use those loopholes. Laws ought to be clear, explicit and just. I never heard remarks of a more serious import than those were. I hope we shall come to that matter later in detail on the Committee stage.
The rest of the Minister's speech was of the usual Socialist variety—up and up and up, and on and on and on, to a bigger and bigger industry. I was pleased to hear my right hon. Friend the Member for Aldershot (Mr. Lyttelton) take the Minister to task on this matter and explain to us the danger of planning for over-production in steel. I would remind the House of the speech, which I dare say the Labour Party now regret very much—I am delighted to see the Chancellor of the Exchequer here because he ought to have read it and I will tell him why in a moment—made by the Chancellor of the Duchy of Lancaster when addressing the Fabian Society of London on 12th November. He is reported as saying:
The national interest demanded that we should have an iron and steel industry more efficient today and larger than it now was or than its private owners proposed that it should be. The present high command in the privately-owned steel industry could not be relied upon to extend it as fast as or as far as the national interest required.
So now largeness has become a virtue of itself with the Labour Party, if we are to


judge from this speech by the Chancellor of the Duchy. The right hon. Gentleman's attitude is "get rid of these small-scale capitalists and financiers sneaking about their City coffee houses. Hitherto they were the hated, all-powerful bosses. Now they are small men who have let the country down. We must have large men and large quantities of money, more plants and masses of steel. The entire resources of the State must be engaged. I suppose that the Chancellor of the Duchy, if he had had more time, would say again that the City must be dragooned and 2½ per cent. Daltons raised, ad lib. Something bigger and more colossal is to be done for steel than ever before. Finally, he gave us that glorious phrase again "all in the national interest," the shrine and altar upon which so many cosmic planning daydreams have been laid. What does the other Chancellor say about all this? There was a recent memorandum from the Organisation for European Economic Co-operation which said:
The maximum possible effect of increased production in Europe will be attained only if each individual European country is willing to take account of the economic needs of the group as a whole, when planning its production.
That is a very careful instruction to the Government about markets and capacity in Europe. The House is entitled to know whether that instruction has been followed. We ought to know whether the large visions of the Chancellor of the Duchy are based on a calculated shortfall in steel contributions to Europe. Are we nationalising steel in order to make up a deficiency, an existing deficiency, in meeting the commitments to which we are engaged? Or is the reverse the truth—that this is another example of our "dragging our heels in European economic co-operation" and that Socialism means intensive economic nationalism. Is the Chancellor of the Duchy, with his large views on steel, in fact declaring economic war on the steel plants of France, Belgium and the Ruhr? Which is it? The Chancellor of the Duchy is just going to Paris in order to make Europe safe for democratic Socialism. I hope very much that his colleagues on the Committee will take cognisance of his speech on steel and will ask him exactly what he meant by it.
There are more serious things to be said still about this elephantiasis of steel.
Planning for full employment in a vast industry may have very disastrous effects from the long-term economic point of view. I do not think that enough has been said about this matter hitherto, and I hope the House will therefore forgive me if I devote a few minutes to it. Who knows what raw materials and commodities the world is going to make use of in the next quarter of a century? Who knows whether railways will give way to air and road transport, or whether aluminium or some tough chemical plastic, not yet discovered, will replace steel? I see that the French are putting rubber tyres on their railways. There are other changes of this kind. Who knows Whether concrete bridges will increasingly replace steel?
Who knows whether the economic self-sufficiency for which the Socialists seem to plan will not ultimately destroy the need for a large part of our shipping and shipbuilding? I dare say that some scientist in this country at the present time who has not yet been heard upon the subject could dispose of the grandiose plans of the Chancellor of the Duchy in the course of a couple of sentences. He might very well say that we ought to be very cautious indeed about steel development, taking the long-term economic point of view. Of course, laissez faire has a complete answer. Steel would decline at the very moment when the applied scientist and the ultimate consumer of the finished product began seriously to turn their attention to alternative commodities. The change would be very violent and, as in the last century, it would be accompanied by fearful social damage which none of us would tolerate for a moment.

Mr. George Porter: Is the noble Lord suggesting that we should take all these matters into consideration when we are paying the compensation?

Viscount Hinchingbrooke: If the hon. Gentleman will hear me out, I think he will get the answer that he wants. We have placed limitations, therefore, upon the operation of laissez faire. What I want to point out to the House is my fear that we are passing too rapidly to the opposite extreme. Coal and gas would be better illustrations of what I have in mind, but steel will do. In extending political patronage to steel, we may be


going in for a vast outlay upon the economic, and especially in these days, the social capital, of steel. Unless we are careful there is a danger of our entering a period of frozen economics in which our ultimate success as a flexible world trading nation may be sacrificed to artificial inflation and prolongation of an industry, which happens to be the main industry at this moment, and with costs in that industry which are sacrificed to an artificially high economic and social life of all those engaged in it.
I was amazed in going round a factory the other day to notice that very nearly half its capital was social capital, such as gardens, playing fields, sports, canteens, a cinema, a theatre, and rest and medical centres. Those things are very nice indeed and hon. Gentlemen opposite will say that we cannot afford not to have them. I agree. Events must trend that way, but I suggest they ought not to go too fast. I do not believe that hon. Gentlemen opposite have sufficiently appreciated what a plight our country may be in when manufacturing countries who are more primitive and more ruthless than ourselves have made up their accumulated war deficiencies. I would point out to hon. Gentlemen opposite what I think is the greatest danger in associating Socialist politics with steel. First, it is that it will become too large, and that economic warfare will ensue with our friendly allies; that is, that we shall selfishly export the unemployment that we are frightened to have at home; and secondly, that social pressures will falsify the economics of steel and divert too many man-hours from the rest of our economy.
The House is justified, on those two grounds alone, in refusing to pass this Bill. There are many grounds on which we should reject it. One is that so few people seem to want it—in my personal experience, only two. The Minister of Health is one. It is a definition of tyranny that the more dangerous a public man is the higher he must be in the councils of the nation. In a well-ordered constitution the only place for a really dangerous man is out of public life altogether. I wish the Prime Minister would give his attention to this. In one simple little action he could re-establish

an almost perfect Parliamentary democracy in Britain and at the same time postpone the nationalisation of iron and steel to the Greek kalends.
I have been through four steel plants in the last six months. I was given complete freedom, I am glad to say, to move about and search for an ardent nationaliser. I came across one only. He was a trade union official. He was like a character out of a Cronin novel. He stood on the floor by the furnaces, his eyes flashing in the fires, and ranted above the roar of the oil jets. However, the other people whom I saw—trade unionists, workers, younger men in management and technicians—were not keen about nationalisation and were not particularly interested. They were satisfied with wages and conditions and did not think that nationalisation would improve them. They were frustrated on one point, and that was that their suggestions for improving the technique of their work so often came to nothing because of the inability of their managements to get the necessary permission from a Government Department.
I should like to deal with the compensation, but I have not the time. When we come to the Committee stage, Clause 7 will require very earnest examination. It was all right in earlier nationalisation Bills, which intimately affected the lives of the people in a way that the Steel Bill does not, to use these tremendous powers of acquisition of public land for those industries, but when we come to steel, it is monstrous to suggest that the Corporation, on the sanction of the Minister, can walk into somebody's land and take property for a house on direct requisition without buying it as other people have to do. I hope we can develop that on the Committee stage.
I want to close with some observations on the concentration of power. Hon. Gentlemen opposite pride themselves on being Social Democrats. Certainly no one would accuse them of wearing the scars of diabolical Communism on their faces. Yet we know from the experience of many Eastern European countries that Social Democracy is the herald of the totalitarian order. The evil that hon. Gentlemen do lives after them; the good, if any, is interred with their bones. The evil that this Bill does is likewise not manifest on its face; it is to come. Power


taken becomes power abused, and, in my view, total technocracy lies behind this Bill as surely as it does in coal, electricity and gas. The Government talk of democratising steel, yet House of Commons control, which is the only State democracy which exists, is specifically excluded from this Bill. What is left is a pyramid of technological power at the apex of which is perched the Minister, not to be questioned, not to be prayed against and not to be called to account to the House of Commons save once a year when the annual report of the Corporation is debated.
It passes my comprehension how Christian Socialists in the Labour Party can wear this thing. There is no democracy in it. There is no workers' control in it. There is nothing in it of which Fabian Socialism can be proud. I challenge hon. Gentlemen opposite to find in this Bill one thing which is good democracy or good Socialism, be it guild Socialism, syndicalist Socialism or plain Christian Socialism. They cannot. What they are doing is to down the financiers and down the shareholders; but have they substituted themselves or their system or their creed? Not a bit of it. The victor here, as elsewhere, is the silent witness of the struggle of our time. The applied scientist, the technocrat, the manager are enthroned. So much for 50 years after Keir Hardie.
The victory hon. Gentlemen are going to celebrate next year is a Pyrrhic victory. We must tell them that now. There is no need for the Minister of Health to bother about buying himself tails and a white tie; a lounge suit will do. His champagne is already as fiat as the triumph of his worker constituents in Ebbw Vale. Parliamentary democracy has lost out; the intellectuals have lost out; Bloomsbury and Transport House have gone down together; and the workers whom all these forces championed at the time have gone back to where they started in the structure of steel. The people left in charge are new names—accountants, administrators, engineers; skilful people, experienced in steel but unrepresentative and uncontrolled. Quis custodiet ipsos custodes? There is no one to look after them.
This is one of the biggest power monopolies Europe has ever seen. Hon. Gentlemen opposite talk of Krupps of Essen

and its owners, and have carried on a vendetta against them and had them tried in the courts. Yet what do we see? Krupps have seduced the Labour Party after all. We have embraced the very ideology for which we continue to persecute these people. It is a hideous and degrading spectacle—Hitler and Thyssen versus Bevan and the new Corporation chairman—a most equal match in nakedness of power and frightfulness of visage.
I condemn this Bill because it concentrates administrative power in a few hands and deprives many of the younger generation of the chances that competitive enterprise would give them to rise to independent positions of management. I condemn it for its suppression of competition and increased bureaucracy, and for the limitations which that places upon efficiency. I condemn it because the Government, which ought to hold a true balancing position in the State, are lending their political power to steel and must inevitably justify the vested interest created by exercising restraints on the development of steel's competitors, that is to say, the non-ferrous metals, concrete, plastics and timber. I condemn it because it is evidence of the vicious speed at which we have left the Scylla of unbridled laissez-faire and are making for the Charybdis of a frozen and false economy. One thing I welcome about this Bill, and that is the chance which is given to a later generation of Conservatives to repeal this and other Measures, and to bring the State back to its true and proper position of maintaining social justice in industry and acting as ringmaster for independent, contending enterprises.

7.20 p.m.

Mr. E. L. Mallalieu: We have already heard in this Debate an expert speaking from the Opposition Bench, the right hon. Member for Aldershot (Mr. Lyttelton), and we have heard the noble Lord the Member for South Dorset (Viscount Hinchingbrooke) addressing the House. It transpired from his speech that he was not an expert. Lest it should transpire from my own, equally quickly, that I am not an expert, let me say at once that I am not an expert from personal experience in the iron and steel industries which we are discussing together tonight. However, I do not think anyone is under any misapprehension as to the importance of this project of nationalisation. Other projects have


had their importance, either practical or symbolic, but this one has as immense importance on both grounds.
I come from the constituency of Brigg, a name which is famous alike in agriculture and music for its Fair. It is a constituency which contains in its boundaries a most astonishing centre of industrial activity, namely, Scunthorpe with its great iron and steel industries. A generation ago this borough was but a hamlet with thatched cottages and a water pump; now it has an immense area in its boundary, with well-planned streets and thousands of new houses, neat and trim. To the north of the town there is a large area which has been stripped of its surface because it had metal-bearing ore in it, and the roads across that area now are like railway embankments across a fen, the level of the earth on either side of them having been excavated to a considerable depth.
Nearby there are immense steel works with their chimneys and fuel elevators, condensers and gas containers—all these things standing out against the sky like some vast medieval fortress with its bastions and turrets and towers. I can assure this House, however, that inside these great cathedrals of industry there is absolutely nothing medieval. There one hears the clang of metal, the roar of fire and the hiss of steam as it issues skywards. At night it is not just the red light above an altar which sends men's thoughts heavenwards; it is an immense illumination of the whole sky as some giant furnace is tapped and the hot metal pours out into some gigantic ladle. Very well was the motto of the borough of Scunthorpe chosen, and for the benefit of the noble Lord I will translate it: "The heavens reflect our labours." That is just what is happening at Scunthorpe today.
I apologise to the House for having attempted to give this description of that most astonishing area of North Lincolnshire. It was into this area in the early part of this year that, by the hazards of political fortune, I was plunged to fight a by-election. Now, in the course of that by-election I suppose we had 40 meetings a week, and there were three weeks of that campaign. At every meeting this issue of the nationalisation of iron and steel was raised. If by any chance

I forgot to mention it, I can assure hon. Members that I was quickly brought to heel by questioners at the end of the meeting—"Are you going to nationalise it?" "Do you stand by what your party said in 1945?" "What is your own view on it?" "Are you going to do it?"
I remember, in particular, a meeting of shift workers in the morning. These men came in their grimy working clothes to the large cinema of the town, and they were addressed by my right hon. Friend the Chancellor of the Duchy. I remember well how he was cheered to the echo when he assured that audience of shift workers that there would be no backsliding about the undertaking given in 1945. Upon this I think I can claim in this House to be an expert: I have no doubt at all what is the view of the steel workers in that area of Lincolnshire. After all, I fought the by-election there recently, I have been back more recently, and so I can speak with authority on that if on nothing else.
The noble Lord said he had recently been in some steel works, and apparently he found only one man who was in favour of nationalisation. Does not that show his blindness? Let him come up to Scunthorpe and go into any of the steel works there and. if he comes away with that idea he will have to put on his glasses, and take them off, even faster than he did tonight during his speech. Every weekend that I have been down to this constituency since the election I have come across men in the street, in the club and even in church, who have said, "What are you going to do about this industry now?" "When is this Bill going to be produced?" "Is it true what the bosses are saying, that our section is not going to be taken over when the rest is taken over?"
One can hardly arrive in Scunthorpe without being asked some such questions as those, and I can assure the Government that if they had delayed much longer in the production of this Bill, there would have been one of their humble supporters who would have been in great difficulties in his constituency in North Lincolnshire. I mention this, not because a Bill is necessarily good because the workers in one section of an industry want it, but because it shows that the claim of the Opposition that those engaged in the steel industry do not want national ownership


and control is utterly false. It merely shows how completely out of touch they are with the steel industry, except perhaps with just a few of the big monopolists at the top.
I want to refer for two or three minutes to a subject to which I should prefer not to refer, especially in view of a generous remark made by my right hon. Friend in introducing the Bill. I refer to the question of the relations which exist between the bosses—for want of a better one I use that not very descriptive, compendious word—and the men in the steel industry. It is true, of course, that there have been no major strikes or lockouts for a long and welcome period of time. That is because to a large extent the steel workers have a highly developed sense of duty towards the community. However, I think we should be wrong were we to allow ourselves to deduce from that happy state of affairs—happy so far as it goes—that there existed at the present time in this industry a spirit of cordiality between the workers and the firms.
Formally, relations between the men's unions and the firms, to use a diplomatic expression, have been correct; but of the present I venture to say—and I do so with all sense of responsibility—from my observations and what I hear, that feeling between the men and the firms—whom they call the bosses—has never been worse in the last 20 years than now. That is a very serious thing to say, but I feel it my duty to say it to the House in view of all the stuff we have had to read in the newspapers emanating from hon. Gentlemen opposite and, indeed, from a good deal of what they themselves have said.
That is the position as I see it. There is enough in the steelworks today to blow the whole lot sky high, were it not for one saving expectation—the expectation provided by the Bill that their beloved industry is going to be taken at last into the security of national ownership and control, to make their own job secure and to make that industry serve the nation as it should. [Laughter.] I can tell the noble Lord at once what it is: It is the national interest once again. The steel worker believes that there is such a thing as national interest and he is out to serve it to the best of his ability.
If there is any one thing more than another which is causing this feeling of

unrest in the steelworks today, it is the quite extraordinary increase in the appointment of gaffers—supervisory staff—during recent years. I can think of one place—a section mill—which in 1938 had a manager, an assistant manager and a youth in its office. Today, in addition to those same three jobs, there are a first manager's assistant, a second manager's assistant and a third manager's assistant. That is going on all around steelworks. These wretched men have received such appointments because, to put it in the way in which it is said in the steelworks, the bosses have put their own men in key positions to see what is going on. These men wander about the works, not knowing what to do and with no specific job. No one has succeeded in showing me what are the jobs of those three managers' assistants. This is one of the most serious factors which give rise to the feeling which undoubtedly now exists.
One other point which I wish to make is that in one of the works in Scunthorpe—and they are big steelworks, for their length is measured in miles rather than in yards—the bosses were firmly convinced that a particular section of the works was not going to be nationalised. So they started moving into that section the very best machinery they could find from the remainder of the works—for which hon. Members and everybody else will be responsible and will have to pay in taxation when we come to the matter of compensation. All the worst machinery was left behind in those parts which it was thought would be taken over and the good stuff was taken into the section which the firm was certain would' not be taken over. When such things take place in an industry the men in it cannot possibly work in pleasant and peaceful harmony with those in control.
We have heard a great deal about the records produced by the steel industry in recent months. It is happily true that the output of ingot steel is higher than it has ever been. This is largely due, as the right hon. Member for Aldershot (Mr. Lyttelton) admitted, to the fact that the men are now employed on the continuous working week. It was the men who asked for that continuous working week, in spite of all the inconvenience to their way of life in which it would involve them. This is one of the main


reasons for the great increase. Of course, over recent years, there have been improvements in technical processes. We have even seen expansions of plant here and there, in spite of the dead hand of private monopoly which was over the industry for so long. But the fact that records are made is absolutely irrelevant to the question of whether or not the industry is efficient. Records are bound to be made. Production in an industry always goes up at a time when its products are in demand.
Whilst the reasons I have mentioned have contributed to that increase, there is one matter on which I must make a very serious observation. It is in connection with the records of individual shops. There is not a worker in the steel industry today who does not know that many of those much-boosted and much-vaunted records are bogus. What I mean is this: sometimes it has been a question of starving one shop of raw materials so that the production of another shop could be boosted. There have been cases where the first hand, whose responsibility it used to be to say when a furnace should be tapped, has received orders from above to tap it before he knew it was ready for tapping; when the steel went across the weighbridge—he received his money, of course, for he is paid on a tonnage basis, yet that steel has had to be sent back to be remelted, with the result that he got his money twice over. Whilst this went on, a rolling mill had been kept idle for want of that steel. All this was done to produce these fictitious records for propaganda purposes.

Colonel J. R. H. Hutchison: Has the hon. Member thought of telling the Steel Board of these allegations?

Mr. Mallalieu: I am very grateful to the hon. and gallant Gentleman for instructing me as to the way in which I should go about my business. No, I have not thought fit to do that; I have thought fit to come here, to the House of Commons instead, which seems to me not a bad way of doing it.
It might be asked why the first hands, who have had to do these things and have seen them going on, troubled about them since they were getting their money

twice over. But they do mind, because they are craftsmen. They believe in their hearts that these records have been produced for no other purpose at all than that of making cheap propaganda points to be used against them and the other men working in the industry.

Brigadier Prior-Palmer: Brigadier Prior-Palmer(Worthing)rose——

Mr. Mallalieu: No, I cannot give way to the hon. and gallant Member. I shall follow the example of his right hon. Friend when he was interrupted on perfectly good grounds.

Brigadier Prior-Palmer: Just substantiate it by one word.

Mr. Mallalieu: Many of the older in the steel industry measure their lives in that industry and elsewhere by the successive periods of boom and slump. They do not say that such and such a thing happened before the first world war or before the second war. They say that it happened before the 1921 slump or, perhaps, before the 1924 slump. That is how things have gone in their lives. They can remember the soup kitchens, even in Scunthorpe. Only last week I met a man who had been thrashed by his father for taking soup. Such is the proud independence of the steel worker of that part of the world. Those are the sort of things they remember of the old days.
It is not by any means only the so-called workers who favour nationalisation. Many of the managerial staffs, and many quite high up managers, now have inclinations in this direction. Not very long ago a manager to whom I was speaking said that the slump in 1921 came as a thief in the night; no one expected it. The office staff had to work overtime to get out the notices. That is the way he put it. He said, "We are not going back to that sort of thing, whatever else may happen." At that time men were laid off without thought, not because they were not needed by their country and their industry, but because it was not immediately profitable for the industry to employ them. They might have been kept on renewing the plant, making renovations and extensions and new erections and so forth; but they were not.
I would like to have the indulgence of the House to make a short quotation. It


is a quotation which I have no doubt hon. Members opposite will say is out of date, as it was written in 1930. The quotation is:
We all know that this is a time when our plant should be overhauled, obsolete apparatus scrapped and new erections carried out, but we are faced with the fact that it is a difficult matter, owing to financial stringency.—
In other words, all the money had been taken out of the "kitty" when times were good and it was not available, therefore, for doing these necessary things. The quotation goes on:
Times have been good and in those days industry was made to yield every copper of profit for dividends. Insufficient allowance was made for depreciation and the obsolescence factor was almost entirely overlooked.
That is not a Labour Party pamphlet. That is an address by an official of the Coke Oven Managers' Association to that association. That was the sort of thing the managers were saying among themselves as long ago as 1930. The people engaged in the steel industry, so far as my observation goes—and I give it to the House for what it is worth—are fully determined, not to a man, of course, but the great majority of them, to see this industry placed under national ownership and control. They believe their own jobs will be more secure and that the industry will become one of the main supports of the country in bringing back those happier and more prosperous times for which all of us, on all sides of the House, so earnestly long.

7.42 p.m.

Mr. Henry Strauss: There are so many points on which I disagree with the hon. Member for Brigg (Mr. E. L. Mallalieu) that I should like to start with the two points on which I agree with him. Those points are recognition of the extreme importance of this Bill—in which I think he is completely right—and his tribute to the men in the industry. I was glad that that tribute was also paid by my right hon. Friend the Member for Aldershot (Mr. Lyttelton) in his opening speech for the Opposition. Of course, the great results now being produced in the steel industry are largely due, as has been said in previous speeches, to the excellent work they are doing and, among other things, to the continuous working week.
There I must part company with the hon. Member for Brigg. Knowing that

many hon. Members wish to speak in the Debate, I shall concentrate as far as possible on a few main points. My right hon. Friend the Leader of the Opposition, in an intervention the other day, said that this was the wrong thing to do and it was the wrong time to do it. I am not certain that those were his exact words, but they provide a convenient description of the two sets of arguments I wish to put before the House. To take first the point of the timing, even supposing this Bill were as good as I hope to convince the House that it is bad, hon. Members should think of some of the inevitable disadvantages of bringing it in now when the industry is contributing so largely to our survival, as has been pointed out by the Chancellor of the Exchequer himself.
Let us see some of the inevitable disadvantages. First, there is the disturbance to the industry. In opening the Debate, the Minister mentioned that a large part of the Bill was devoted, perhaps inevitably if nationalisation is to be carried through in this way, to preventing managements from doing this, that and the other. The effect, of course, must be to make almost all action by managements extremely difficult and dangerous. The right hon. Gentleman himself was conscious of that danger because, so far as it was possible for him, he tried to say some words to minimise that effect,
but he recognised, and rightly recognised, the danger. Not only will they have to find out all the extremely difficult provisions in the Bill, but even then, if they do something which the Bill permits and the Government find out later that they disapprove, the managements are threatened with retrospective legislation. The only effect must be a slowing down of all their activities and their being unable to risk even the most necessary acts without the precaution of going to the Minister first for permission.
If that is the disturbance to the industry, what about the disturbance to the nation? I hope hon. and right hon. Members opposite will understand why this Bill is so disturbing to the nation. It is for the very simple reason that, if it is right in present circumstances to nationalise this extremely efficient industry, which is doing so well at present, there is no industry in the country which will feel any security that it may not be the next on the list to be nationalised. There is no argument which can be put


forward for nationalising this industry which could not, mutatis mutandis, be put forward for nationalising a great number of other industries.
I am sorry that the hon. Member for Wednesbury (Mr. S. N. Evans) has left, because I wish to deal with an argument in his speech and with something he said with which I am partly in agreement, but from which I think he drew the wrong conclusion. He mentioned what was said in the "Economist" on 6th November about the feeling in the United States on this subject. He said something with which hon. Members in all quarters of the House will agree. We all feel a great dislike for any outside Power interfering with what we may care to do in exercising our own good sense with our industries and in our politics. But I do not think the "Economist" would fail to share that view in the least. I hope that I shall be able to justify that by reading what the "Economist" said. I credit hon. Members opposite with sincerity in desiring to be independent of America. If they are so desirous, the sooner we bring independence about the better, and certainly we on these benches share that desire.
The point is that we want to achieve that independence of America before we wantonly, as it may seem, risk losing American aid by acts which may threaten the continuance of that aid on which, in the view of the Chancellor of the Exchequer himself, our survival depends. Bearing that in mind, I will read two sentences from the "Economist":
… the only reason why the British people are not being daily brought up, in their individual lives, against the painful realities of their country's economic position is that Britain is still living on lend-lease. The Americans have been meticulous in not interfering in domestic political concerns; but they have not concealed their dislike of the project of nationalising the steel industry. It is surely only common prudence not to do anything, if it is not strictly necessary, that might compromise the future prospects of the Marshall Plan.
I say there is nothing in those sentences of the "Economist" that means that the writer of those words is any less eager than hon. Members in every quarter of the House that we shall achieve independence of America.
Lest it should be thought that the "Economist" was exaggerating, I will quote a very interesting interview which appeared in the "Manchester Guardian," which hon. Members may possibly have missed. It was an interview with Mr. Hoffman, when he was being questioned on steel nationalisation. He said that this had been a "hot question" in his recent conversations with British Ministers.
But I told them"—
this is Mr. Hoffman speaking—
that as far as we were concerned what they did about their industry was their business, and what we did about our dollars is our business.
I think that that is put quite clearly and in a way to which hon. Gentlemen opposite will not take any exception. I suggest to the hon. Member for Wednesbury that it completely justifies the passage in the "Economist" which I have quoted, and with which he found some fault.
I have given reasons to show that very serious grounds of objection to this Bill can be directed to the question of timing. But apart altogether from the question of timing, is the thing which the Bill proposes to do the right thing to do? Why do the Government now propose to take over this supremely successful industry, which is consistently reaching the targets set for it, and so consistently doing so that new targets are constantly being set, which the industry then reaches. It enjoys excellent labour relations. Here I might say to the hon. Member for Brigg (Mr. E. L. Mallalieu), who mentioned one or two things to modify that view about the excellence of labour relations, that as he spoke I thought that at any rate the labour relations were at least as good as those which now hold in the coal industry between the coalminers and their present employers.
The steel industry is working efficiently for a moderate reward. In Press interview after Press interview, and official document after official document issued by the Chancellor of the Exchequer, he holds up this industry as a shining example, and offers very serious criticism of the nationalised coal industry. I say that in these circumstances, at this moment, to decide to nationalise this industry, with all the attendant risks, is irresponsible to a degree which it is scarcely possible to describe.
One could conceive of such a Bill being introduced if it were necessary to carry out some policy which the Government desired to carry out. That would at least provide an argument for it, although I think that such an argument could be destroyed. But neither in the Bill nor in the speech of the Minister in moving the Second Reading today has there been given the slightest indication of a policy or plan for the industry. I know there are many Socialists in the country who think that they can prove that they are planners by saying that they are in favour of nationalisation. Nevertheless, the well-informed in this House, in whatever part of the House they sit, know that one of the earliest signs of the fact that the Government have no plan whatsoever for running an industry is an announcement of their decision to nationalise it.
What is the effect of this Bill? As my right hon. Friend the Member for Aldershot (Mr. Lyttelton) pointed out, it will produce the most fantastic division of the industries of this country—apart altogether from the basic operations which it is primarily desired to nationalise—between those industries, say in engineering, which are to be nationalised and those which are not; between the State-owned section and the private section. Let me take engineering as an example. There will be a State-owned section and a private section. That will be true of many other industries also. It will be within the power of the State, with no limitation imposed by this Bill, to starve out the private sections simply by the refusal of raw materials, or by supplying the raw materials only at higher prices. In his speech, the Minister said that of course they would be fair. Then why on earth has he not put in his Bill a simple obligation compelling him to be fair? There is not a single obligation dealing with the question of fair trading or not charging differential prices. Is that chance or is it deliberate? It is either deliberate and wrong or negligent and culpable.
Things are taken over or not taken over according to the size of the concern; in so far as there is a distinction it is a distinction by size, exactly the distinction that was made in Czechoslovakia, preparatory to the enslavement of that State. There are plenty of precedents for nationalising in that manner, and with

that object and with that end ultimately in view.
What does this Bill do? My right hon. Friend the Member for Aldershot was completely right in saying that the Government had designed the Bill so that they could be all things to all men and advance whatever argument was convenient. They are leaving the boards of the various companies unchanged. The right hon. Gentleman truly said that on the morrow of taking over not a single board would be directly affected. That is a lot of comfort, is it not? What is to happen a few days later? I should like to put this dilemma to the Minister who is to reply to the Debate. Are the Government to leave the boards substantially as they are, and, if so, what happens to the argument of the Minister of Health, who says that those who are controlling the industry are intellectually bankrupt? Is the industry to be left in the hands of the intellectually bankrupt, or are the existing boards to be sacked in order that rather tired and inefficient Socialists who cannot pull their weight in this House may, in extreme old age, be given jobs in the nationalised steel industry?
I must say something about compensation, a subject which I understand will be dealt with mainly in the Debate tomorrow, both from the Front Bench on this side of the House, and no doubt by the Chancellor of the Exchequer. I wish to refer to this subject, as I shall have no further chance of intervening in the Debate, and I feel that it is not improper for a lawyer to feel some concern with justice. The compensation provisions are outrageous and I wish to say a few words about them. I do not think that they can be summed up better than they have been summed up by a man who is not a Tory. Again, I quote from the "Economist":
To rig the market first and then to make compulsory purchases at the market price is more than sharp practice, it is plain dishonesty.
Those are severe words. They are amply justified and they will be proved to the hilt when this Bill goes into Committee.
I wonder if the Chancellor of the Exchequer fully realises how much injury he does to this country when he causes this Government, or permits them, to act dishonestly to their own citizens? This country still has assets abroad. It still


has some invisible exports, and the Chancellor of the Exchequer wishes that they were much greater. Is he quite sure that no foreign country may take steps, first to make worthless the shares of some company which is trading in their territory, and then, on the precedent set by this Government, to take over a British concern on the basis of the market price of those shares? I believe that the effect of taking over steel concerns at the market price of the shares will in some cases be that the Government will acquire all the machinery for nothing. They will sometimes actually acquire solid machinery and plants, either for nothing, or for something very much less than their actual cost or value. But I do not want to develop unnecessarily what must be properly considered at greater length later in the course of this Debate.
There is, however, one matter which I am bound to raise, and it is fair that the Government should have full notice of it, because I am really eager to know what their reply is. There was a Debate in this House in May, 1946. It was a two-day Debate and the right hon. Gentleman's predecessor at the Ministry of Supply made a very important speech. What he said about compensation for work done in the interim period, that is to say, the period between that speech and nationalisation, was so important that it was repeated in set terms by the then Chancellor of the Exchequer speaking on 28th May, 1946. I wish to quote a short passage from his speech which hon. Members will find in Columns 1004 and 1005 of the OFFICIAL REPORT. He was dealing specifically with the interim period, and making the most express undertaking to the iron and steel industry. This is what he said—this is the present Chancellor of the Duchy of Lancaster speaking:
My right hon. Friend the Minister of Supply said yesterday—and I quote his sentence so as to emphasise it and associate myself with it—speaking of the interim period and work during that time: 'There must be no slackening of effort, and the Chancellor of the Exchequer … has authorised me to assure the industry that whatever the final method and basis adopted' "—
and here the Chancellor breaks off his quotation and says—
He was here referring to the payments of compensation for taking over plants which are to be nationalised—'proper allowance will be made in assessing compensation for the

results of any expenditure incurred from now onward, on approved schemes of development or rehabilitation.'
A little later in the same speech he said:
I repeat that with emphasis, so that there shall be no misunderstanding or any grounds for mistake anywhere, as to our attitude to the finances for the development period."—[OFFICIAL REPORT, 28th May, 1946: Vol. 423. c. 1004–5.]
Any iron and steel concern that believed—and at that time one thought one could rely on such emphatic declarations of policy by a Minister made solemnly in the House of Commons—any iron and steel concern that assumed that the Minister of Supply and the then Chancellor of the Exchequer were telling the truth will be disappointed on reading this Bill, because there is no effort whatever to carry out that pledge. Simply acquiring the assets by taking over the shares at the market price is a deliberate breach of that pledge. I shall be interested to know which of two things the Chancellor of the Exchequer will say tomorrow. Will he say: "In this Bill I have carried out that pledge "—and, if so, I shall be glad to learn in what provision of the Bill he thinks that he has—or will he say, for some reason or on account of something which has subsequently happened, "I do not think that that pledge is any longer binding?" I think that that is a serious question to which the House and the country are entitled to an answer.
The hon. Member for Wednesbury (Mr. S. N. Evans) in the course of his long speech never made it clear to me—and the same I am bound to say applies to the speech of the Minister—whether the Government believe that, as a result of this Measure, prices of steel will be lower or higher. Yet it is absolutely vital for the survival of this country to know which the result is to be. If steel prices go up, if the precedent of the nationalised coal industry—to mention one precedent—is followed, then the necessary conditions without which we cannot recover—or, in the Chancellor's words, survive—will not be satisfied. I wonder what effect hon. and right hon. Members opposite think that this Bill and its sequel will have on the export trade? I wonder if they are quite certain that foreigners will be deceived by their leaving the names of the companies unchanged? Because the thing still calls itself Dorman


Long, do they really hope that any foreigner will be deceived into thinking that it is Dorman Long?

Major Bruce: No. it is the Iron and Steel Federation.

Mr. H. Strauss: The hon. and gallant Member has given an answer that apparently satisfies him, as most of his answers do. But I think we should like the answer in due course from the Front Bench.
If, as I submit to the House, this Bill has the disadvantages which I have mentioned; that it is folly to indulge in it in any event until we have achieved independence of American aid; that it causes a disturbance in the industry which we cannot at the moment afford, and slows down production; that it causes this lack of confidence in the nation, because if this goes through, as has been admitted by the more honest as it seems to me of the Socialist propagandists, it will assist the coming into being of the Socialist State——

Major Bruce: The hon. and learned Member all the way through his speech has been referring to "industry." Would he be a little more particular in defining what he means exactly by "industry"? Does he mean the 600 or 700 directors of iron and steel or the 35,000 workers in the industry, or both?

Mr. H. Strauss: I was not aware that I had mentioned the word "industry" very often, and I cannot remember which sentence the hon. and gallant Member has in mind. But let me tell him at once that I say that the effect of this Bill on confidence is absolutely disastrous in the case of everybody who desires to maintain a free society. When this Bill has gone through, the accession of power to the State will be so great that there is no sphere of private enterprise that will have any security of continued existence at all. I think that the sections of industry, and of those employed in industry, who dislike that are very much greater than the hon. and gallant Gentleman believes.
I believe that nationalisation threatens efficiency and I believe that it threatens freedom. By that I am not thinking of the freedom of employers, but of another freedom which I regard as of great importance—the freedom of a workman to change his employer.

Major Bruce: Major Brucerose—

Mr. H. Strauss: I think I had better not be led astray—unless the hon. and gallant Gentleman has some important point which he wishes to put——

Major Bruce: And the freedom of the worker to say that he wants nationalisation.

Mr. H. Strauss: Of course. The hon. and gallant Member is quite wrong if he thinks that I wish to stop anybody from saying that he is in favour of nationalisation. I only regret that the people of this country, if the Government get their way, are not to have a chance to give their views in time.
If, as I say, this Bill has all the disadvantages of timing and effect; if in fact by giving no guarantee whatever that there will not be unfair discrimination against private industry; by giving no guarantee whatever that prices will not go up, as they have gone up to the consumer in other nationalised industries and services; if by all those methods it threatens our survival, what is the real explanation why it is now brought forward? I can tell hon. Members. It is perfectly simple. I do not pretend to feel the least surprise that it is brought forward. It is brought forward because the whole principle and preaching of the Marxist says that it must be. The Communists have made no secret of the fact that an industry of this sort must be nationalised. We know from the Socialist Party's own introduction to the Communist Manifesto, Centenary Edition, which they recently brought out, that in what they have already achieved or are about to achieve they claim a common inspiration with the Communist Manifesto. They say so in so many words.
I have no doubt at all that on Communist principles this Bill can be absolutely justified. It does not give the Communists everything they want at once—nor did the preliminary steps in Czechoslovakia—but they can look upon it with every confidence that, as worked, it will in due course, unless the Bill is reversed, give them everything which they seek. On Marxist principles it is absolutely right. That is why it is not at all a matter of chance that those members of His Majesty's Government who have been most prominent in backing this


Measure—the present Minister of Supply, the Minister of Health and, as we shall no doubt hear tomorow, the Chancellor of the Exchequer—are precisely those members of the Government who were once expelled from the Socialist Party for desiring or making a common front with the Communists. They at least have been consistent. Once more, the "Economist" is quite right when it says:
The introduction of the Steel Bill is the clearest example west of the iron curtain of the way in which a minority within a minority can achieve its aims.

8.13 p.m.

Mr. Jenkins: I am glad that the hon. and learned Member for Combined English Universities (Mr. H. Strauss) referred to the compensation terms on this Bill because, although it may be that we are to have the main Debate on compensation tomorrow, I, like the hon. and learned Member, will not have another chance. Therefore, I should like to say something about compensation tonight.
It is clear that those newspapers which normally support the party opposite are getting most excited about the compensation provisions of this Measure. Indeed, it appears that it will be in the very forefront of their attack. They seem to be worried, as was the hon. and learned Member, that the steel shareholder will not make a profit out of being nationalised; worried that he is merely to receive the highest price—not the lowest price but the highest price—which he would have received for his securities on the free market at any time in the last decade. That is what they will get under nationalisation, yet people talk about this as being barefaced robbery. I should like to ask if 33s. 1d. for a Dorman Long ordinary shareholder, for instance, is barefaced robbery when 25s. 1½d. is all that he would have been able to get if he had been forced to realise on the Stock Exchange a year ago. If 33s. 1d. was barefaced robbery, then the price which the free market would have given him absolutely defies description.

Mr. H. Strauss: I think that the hon. Member is really missing the point. I do not think anybody disputes the fairness of Stock Exchange prices for those shares which come on the market at any particular date. What is disputed and

what is in question, is whether this is the right way of acquiring a complete concern with all its plant and so on. The contention is that what ought to be done when the whole company is taken over is to value the assets and then give the shareholders what they would get on a winding-up.

Mr. Jenkins: We cannot accept the point of view that there ought to be a special bonus for shareholders under nationalisation. If something is fair when it is a transaction between two individuals, it appears to us equally fair when it is a transaction between the people as a whole and a few individuals. If the attack of hon. Members opposite is against Stock Exchange values as a general basis of compensation, they really ought to be most careful about not attacking the Stock Exchange too strongly and not telling us too often that it is an irrational piece of nonsense that its values are never fair, and that the last thing it does is to show the true value of a company. Otherwise, they will be putting ideas into the minds of hon. Members on this side of the House about the future of the Stock Exchange.
Quite apart from these general objections, hon. Members opposite have certain more specific objections to the use of Stock Exchange values in the case of steel. I want to look at some of these objections and to see how far they hold water. Perhaps they are most clearly put in an article in the "Stock Exchange Gazette" of 6th November, which said:
But in the case of the iron and steel group of companies the basis is exceptionally unfair, because the prices have been depressed by the threat of nationalisation, by the Dalton 'bonus' tax which has prohibited the re-establishment of capital on a level more closely representing the capital ploughed back and employed in the business; by the large capital commitments met out of profits which have conservatively kept down the rates of dividends, and, finally, by the voluntary limitation of dividends in agreement with the Chancellor's request.
The "Financial Times" said the same thing but at much more length. I think that that puts fairly clearly and shortly the objections to the use of Stock Exchange valuations in the case of steel. I should like to look at these objections one by one. First, there is the statement that prices have been "depressed by the threat of nationalisation." We often hear this statement but we hear very little evidence in support of it. I submit that


that is because there is just no evidence in support of it. I have looked into this, as far as I have been able. I took what I thought was a fair cross-section of the steel industry. I took the ordinary shares of Colvilles, Dorman Long, United Steel, the Lancashire Steel Corporation and Stewarts & Lloyds. I tried to examine the course of those shares over the past three and a half years taking 2nd July, 1945—a date quite clear of the period of office of this Government—as my base date.
On 2nd July, 1945, the "Financial Times" Index of Industrial Ordinary Shares was 114.7. I equated the prices on that day of the shares in the steel companies I have mentioned with 114.7. That enabled me, by making suitable calculations, to compare the course of steel share prices with the course of industrial ordinary share prices as a whole over the subsequent period. What do we see? We see that by October of this year, by the time we come to the date on which the take-over prices are based, the "Financial Times" Index of Industrial Ordinary Shares had gone up to 118, but the index figure for these steel shares had gone up to 140.6. Ordinary shares as a whole have gone up by 2.9 per cent. Steel shares, "depressed by the threat of nationalisation," have gone up by 22½ per cent.—a rise more than seven times as great.
I confess that when I looked at these figures which have been most carefully checked, I was amazed; but having seen that they were checked and that they were right, my amazement now turns to the party opposite for its effrontery in claiming that the market has been depressed by the threat of nationalisation. Perhaps their answer to this might be to say that, if it had not been for nationalisation, the percentage rise would have been greater still, perhaps, 10, 15 or 20 times that of ordinary shares on the whole, instead of merely seven times as much. Quite apart from the implausibility of this on the face of it, there is no evidence at all to support this view. If this were in fact the case, we should have expected to see steel shares being very sensitive over the last year or two to the imminence or otherwise of the threat of nationalisation. That was not so at all; they survived the result of the General Election with some equanimity. They did during the next year or so sag a little in relation to

ordinary industrial shares as a whole; the gap between them was greatest at the end of 1946 or the beginning of 1947.
But this was the very time when, in the life of this Parliament, the threat of nationalisation was least imminent. In fact, steel shares only began to catch up when the Prime Minister came to this House in October, 1947, and said that this Bill was definitely going to be introduced in this Parliament. Most of them gained about sixpence on the strength of this dreadful piece of news alone, and, since then they have never looked back, but have gained strength as the date for the introduction of this Bill has come nearer and nearer.
My second point is the question of the effect of the bonus tax on these shares, as put forward by the "Stock Exchange Gazette" and also by the "Financial Times." I do not want to argue this in detail, but only to point out that to say that the bonus tax has kept steel share values down is a very strange and dangerous argument for hon. Members opposite. When they have been arguing in the past for the repeal of the tax on bonus shares, they have told us that a bonus issue does nothing to raise the aggregate value of a company's shares, that it is a paper transaction which brings the nominal capital into relation with the real capital of the company. I remember the right hon. Gentleman the junior Member for the City of London (Mr. Assheton)—I am sorry he is not here now—putting this very clearly on 7th June of this year, when he said:
The company therefore decides to make what is called a bonus issue. They give to each shareholder one share for every share he already holds. As a result, of course, no shareholder is any better off than before. The fact that he holds two shares instead of one merely means that he holds two shares which are each worth half what the one share was worth before."—[OFFICIAL REPORT, 7th June, 1948; Vol. 451, c. 1762.)
That argument is totally inconsistent with the argument that the bonus tax has kept down or depressed the prices of steel shares. Hon. Members opposite cannot have it both ways—one way under the Finance Bill and another way under the Iron and Steel Bill—and we are entitled to know what is their real attitude on this point.
I come now to the last of the main points put forward by the opponents of the Stock Exchange valuation in the case


of steel. It is that prices have been depressed by an undue ploughing back of profits, partly because of the need for the re-equipment of the industry and partly because of the policy of dividend limitation. This argument implies that it is the present yield and practically nothing else which determines the price of shares on the Stock Exchange. But I submit that, in the case of steel shares at least, this is very far from being so. I have looked again at the five companies which I mentioned earlier, and I have added a sixth, the firm of John Summers. I looked to see how much had been earned and how much distributed and also to see what they stood to yield at the take-over price. The results were extremely interesting. One saw that, in the case of Colville's they earned 17½ per cent., distributed 13 per cent. and stood to yield 7 per cent. They were distributing a high proportion of what they had earned. Stewart and Lloyds earned 33 per cent. and distributed 12½ per cent.—a low proportion of what they earned—and stood to yield 4¼ per cent.
I therefore submit that, to a very large extent, the extent to which a company is ploughing back its profits, for whatever reason, is counteracted by the yield derived from the prices at which its shares stand on the Stock Exchange. If they are pursuing a conservative policy and distributing a small amount, their shares stand to yield 4¼ or 4½ per cent., and their prices of the shares are therefore relatively high.
I submit that, on all these grounds, the Conservative Party's attitude, and that of the financial critics of the provisions of this Bill really does not hold water at all. I think this method of a Stock Exchange valuation is by far the best method for taking over an undertaking which is being nationalised. Take that other method employed in the case of the 'bus companies. This was a very bad example of what can happen in this direction. I remember, some time ago, being advised, though I did not take the advice, to buy B.E.T. Deferred Shares in September, 1947, when they stood at 1,030. On 8th November, 1948, these shares stood at 2,050, which means a tax-free capital profit of 100 per cent. for anybody who dealt in the shares of these companies. By nationalisation on

these terms, money can pass from the people of this country to the speculators in these companies' shares, and I am very glad indeed that this sort of thing is not going to happen in the case of steel. I cannot understand the attitude of the party opposite, which claims to be the guardian of the public purse, and which does try to behave like the guardian of the public purse when it is a case of somebody getting two pairs of spectacles under the National Health Service, but which would allow people to make 100 per cent. profit out of nationalisation in the case of these 'bus companies.
I want now to refer to another financial aspect of this Bill, and that concerns the ability of the industry to raise the money which it needs for development. The right hon. Gentleman the Member for Aldershot referred to it in his speech, and I am very sorry that he is no longer in his place, because he told us a good deal about the Steel Company of Wales. The right hon. Gentleman gave way to my hon. and learned Friend the Member for Kettering (Mr. Mitchison) but, he would not give way to me. He certainly did not tell my hon. and learned Friend that the attempt on the part of the Steel Company of Wales to raise money in the City of London was the greatest post-war private issue flop which had been known in the City. When they tried to raise money through normal channels for the development of that steel company, 73 per cent. of the amount was left on the hands of the underwriters, and the public took up only 27 per cent. I do not pretend that this meant that the steel company did not get its money. It did get its money, but the lessons of that issue will not be lost in the City of London, and, when it is a question of raising further money for steel, the underwriters will be chary of going in with the enthusiasm, which they might or might not have shown in the case of the Steel Company of Wales.
Therefore, it will be either difficult or expensive to raise money in future for development of the steel industry. I believe that the money for this development will have to be public or semipublic. Until quite recently, this view appeared to be held by certain people in the Conservative Party organisation.
because I have been reading Notes of Current Politics published by the Conservative Party Headquarters on 18th October, 1948. The front page is headed "Facts About Steel," and there is a paragraph further on which says:
On the question of financing the reorganisation scheme, it is clear from the Report that half the total cost could be met by the industry itself out of its own resources. The other half would have to be met from borrowing, new capital issues—
Then, there is an inky blob on the page, but, if one holds it up to the light, one can see under the inky blob—
or Government loans or advances.
Well, I took the step of paying a further 6d. to Conservative Party headquarters in order to obtain a second copy of this pamphlet to make sure that this was not a phenomenon to be found in only one pamphlet, but I found the same inky blob in the second. It does seem that until fairly recently certain people at least in the Conservative Party were very willing to agree that this money would have to be public or semi-public; possibly they thought that was an argument not fitting in too well with their general case against nationalisation and they, therefore, abandoned it very rapidly, and possibly a little clumsily.
With the steel industry we have reached the point when nationalisation is the natural next step. It is an industry in which I believe the money must come from public or semi-public sources. It is an industry in which free competition is dead. It is an industry in which even the party opposite admits there must be a good deal of State control. Now, when that position is arrived at—public money, State control, no competition—who are the doctrinaires? Those who want to take the natural and logical step and put the thing under public ownership as well as under public control, or those who despite all these things insist on saying that it must still remain under private ownership?

8.32 p.m.

Sir Arnold Gridley: This is the first time this year that I have endeavoured to catch the eye of the Chair, because since I got knocked out at the beginning of the year, I have lost a good deal of any confidence I may previously have possessed, so I feel tonight rather as if I were making a maiden

speech. However, I did feel that this major Bill raises a matter of such importance in the national interest that I should venture to intervene. What are my credentials for taking part in an iron and steel Debate? Well, for 10 years I worked in the iron and steel centre of Teeside with my headquarters in Middlesbrough, during which period it was my duty to study the operations of iron and steel works and to see to what extent electricity could be used in cheapening the cost of producing iron and steel.
At one time I went out, with the directors of Dorman Long and Company to see what was then the first electrically operated rolling mill in Europe, which was at the works of the company, then existing—I do not know what has happened to it since—at Witkowitz in what was then Upper Silesia. As a result of that visit, the directors of Dorman Long, with their customary enterprise, decided to put down in this country the first electrically driven mill to be installed in Great Britain. I have here a memento of that, of which I am very proud: it is the first angle rolled in Great Britain in an electrically driven reversing mill at Dorman Long and Co., Ltd., Middlesbrough, with current supplied by the Cleveland and Durham Electric Power Company, of which I was at that time a young manager. I value that, and subsequent experiences.
During the first world war—I do not know whether hon. Members realise it—I think it is true to say that something like £50 million was expended on iron and steel works in this country, so that these works were in a position to deal with a very much larger demand for steel, which lasted, I am sorry to say, for a very brief period, and then came a slump.
I remember sitting at lunch in Middlesbrough with the late Sir Hugh Bell and Sir Arthur Dorman and listening to a talk going on between them. Sir Arthur was full of enterprise, expecting the demand for steel to continue, and said to Sir Hugh: "There is a world demand for steel. The world is short of steel. There will be a tremendous demand for it in the years to come." Sir Hugh looked at him and said, "My dear Arthur, before very long there will be 12 big steel works struggling to secure one weak order," and he proved in the


course of time to be the more correct. I mention that because the question has been discussed today as to the Government's intentions of increasing the present productive capacity of 18 million tons a year to something like 20, 22 or 23 million tons.
While the world is crying out for steel today and there is a greater demand for it after the second world war than after the first, because the destruction wrought on many cities and industrial centres of so many countries has been so much greater than after the first world war, the time will come again when the demand for steel will to a large extent be satiated. What then will be the position of those who accepted responsibility for causing the great extensions to the productive capacity of our iron and steel plant in this country to be carried out during the next two or three years, when perhaps five or six years later there may be millions of pounds of money expended on these plants for which there is no use? They will have to be kept on a care and maintenance basis, which is a very expensive business.
If the nationalisation Measure we are now discussing is ever passed and put into operation, it may well add to our other difficulties in maintaining our position as a great industrial nation. In my view, the Government's decision to introduce this Bill and force it through the Parliament is the very negation of sound statesmanship. In a leading article in "The Times" on 27th October, the writer said this:
The new Session should be a special performance called by the continued crisis in the country's affairs. Yet the Government have insisted upon the placing at the top of the bill, Measures to curtail the power of the House of Lords and to bring under public ownership those companies extensively engaged in the production of iron ore or of pig-iron or steel or in the shaping of steel by a rolling process.' It is the stubborn denial of the sane and statesmanlike order of precedence in public business that casts doubt upon the Session's performance from the start.… For the rest of its life this Parliament is faced with responsibilities which have seldom if ever been surpassed in the country's history. The biggest risk is that the most pressing tasks may too often be lost from sight. It is a risk which the Government, by persisting in their offensive against the House of Lords and the steel industry, have deliberately courted. They will be judged by the extent to which the capacities of

Englishmen can be brought freely into play for the salvation of their country.
It is that which leads me to say it is the very negation of sound statesmanship at a time like this that a Bill of this kind, which is so contentious, should be brought in and cause increased disunity in the country. Many of us believe that if this Bill is carried into effect it will disturb the industry, create uncertainty, cause delays and have the effect of reducing output. Is this the time, when the international situation is so serious that the Government are forced to carry through a measure of rearmament, and bring the equipment of our Forces up to date, to introduce this Bill? Do Members opposite, with a sense of responsibility, feel that this is the time to interfere with an industry which is giving us a record output, an industry in which peace and harmony exists between managements and men? The workers in the industry are showing an example which we should all like the miners to follow.

Mr. Fairhurst: Does the hon. Member suggest that under nationalisation, iron and steel workers will not give of their best?

Sir A. Gridley: We can only judge from what has happened in the past. We have heard that story many times. It has been said, "If only the State will take this industry over then the workers in it will work better than they have done before."

Mr. Fairhurst: Does the hon. Member suggest that the miners are not doing that today?

Sir A. Gridley: I suggest that a large proportion of miners, who should know better, could put in more hours and reduce absenteeism. The Minister of Fuel and Power is far from satisfied with the performance of the miners. I am sorry to say this, and I only wish it were not a fact, but it is.
There is another fear I have as to what may result if the industry is nationalised. It has been often argued that wars have been caused by capitalists. We have been told—and I dare say that in a measure it was true—that Germany provoked the First World War because she was determined to wrest from us our industrial dominance and supremacy. But if the State owns iron and steel and there have


to be tenders, as there will, for foreign contracts, such as there was for the great bridge at Sydney, and we have to compete with other countries whose industries may be socialised or still be running under private enterprise, do we not run the gravest risk of international complications and difficulties? It is no answer to say, "But that tender is from the United Steel Company," or "That tender is from Messrs. Dorman Long and Company." It will deceive no one, because it will be known that the real owners of the business are the State, who have acquired all the stocks and shares for the nation. Who can foresee what complications may arise in future? I believe that a grave risk lies there.
Another objection I have is that in addition to monopolies already created by nationalising coal, transport, electricity and gas we are going to add yet another monopoly in nationalising iron and steel. There have been discussions about monopolies and cartels, some of which operated benevolently and others have had bad features about them. However, if there are cartels and monopolies operated by private enterprise there is always a government above who should take steps to remove any malevolent features in them, but when once the State owns the monopoly, who is there to eradicate the bad features of that monopoly?

Mr. Follick: There will not be any bad features.

Sir A. Gridley: If the hon. Member thinks he is perfect, he will not earn the respect of his fellow men. We are all human and we all make mistakes.

Mr. Fernyhough: Does the hon. Gentleman agree that the people would have the power to remove the Government, and obviously that is a far greater power than we have at the present time where the monopoly itself abuses power.

Sir A. Gridley: I quite agree that the people could turn out those responsible for creating these monopolies, and in due course that will undoubtedly happen, but the mischief will be done and it will be extremely difficult to unscramble the nationalised industries. As hon. Members opposite know and as we on this side of the House appreciate, once the ownership of a huge undertaking like iron and steel

has been transferred to the State it is not going to be easy to find people willing to buy their interests back, nor the future capital for subsequent expansion.
My last point is that the great fear of users of iron and steel, like the electrical manufacturing industries, with which I am associated, and which are large users of iron and steel, castings and steel sheets is that in consequence of the passage of this Bill we shall see precisely the same result that followed the nationalisation of the industries to which I have already referred. Coal prices have gone up for the dirty quality stuff we are receiving; electricity prices have been raised in many parts of the country; gas and transport are the same and who is going to say that steel will not follow a like course? No one on the other side of the House will dare say with any certainty that as a result of the passing of this Bill the users of steel in this country will get steel cheaper than at the present time. No one who is a user of steel believes that for a moment.
Those of us engaged in the engineering industries today are turning out somewhere in the region of 50 per cent. of the country's exports. What is going to be the position of this country if in two or three years from now we are not going to be able to compete for the overseas markets because of our high costs? It is all very well for hon. Members opposite to jeer and laugh at some of the arguments put forward today, but they are too often treating these matters very lightheartedly. If as a result of this constant progress onwards for the nationalisation of the industries of this country, we are not able to compete in the markets of the world, then one thing is inevitable, as the Chancellor of the Exchequer has pointed out—unless we can continue to hold our own and expand our exports in the world markets there will be a great increase in unemployment, the standard of living must fall, and we may be faced with a period of semi-starvation. We are in a much more critical situation than the United States or the U.S.S.R. Those countries can grow enormous quantities of food for themselves. They do not need to import. They can exist in a closed economy. The position for us is very different. We have to export in order to import at least one-third of the foodstuffs which we require.
Therefore, I say that a very grave responsibility will fall upon the shoulders of those who vote for the Bill if what I greatly fear should happen. The Bill will have the disastrous effect of making production costs for those of us who are in industry so high that the situation of which the Chancellor of the Exchequer forewarned us will come to pass, or else taxation will have to be raised to even higher level than it is today in order to subsidise iron and steel, coal, etc., so as to permit the manufacturers of this country to be in a position to compete for the export markets of the world. I could not disagree more than I do with what was said by the hon. Member for Central Southwark (Mr. Jenkins). I have no doubt that his speech will be answered fully tomorrow when a former Chancellor of the Exchequer will address the House on the same aspect of the Bill.
To sum up the position I cannot do better than remind the House of the final paragraph of two striking articles by the industrial correspondent of "The Times" published at the end of last month. It reads as follows:
In what way and by how much will costs be reduced by nationalisation? How much more will costs be reduced with nationalisation than without? Will production and productivity rise or fall? Will the workers be more or less exigent? What principle will be applied to prices and investments? How will nationalisation make it more possible to apply the right principles in the right way than under private ownership and management?
Those were the questions put. The writer went on:
The Government have not answered those questions because they do not know the answers.
I listened carefully to every word by the Minister in introducing the Bill. He drew a wonderful picture, very glib and simple. Everything would be all right, but there was not one word of comparison with the experience under the previous nationalisation Acts. I can quite see how pleased managements of iron and steel undertakings will be when they have to get the consent of the new Board, which will receive its general instructions from the -Minister. Suppose something needs to be done, or a few thousands of pounds are asked for, it will take six months to get a reply. That is the experience in dealing with Government

Departments. It is unfortunate, but there it is. That is one of the reasons why when Government Departments interfere with industries that they do not understand they create a stranglehold which makes for great delay.
The Government have no answer to the questions which I have just read out. There has been no attempt to answer them today. Maybe we shall see in the course of the next two days' Debate. Those questions are a damning indictment against the Government. The Government have to make out a case for nationalisation. They have not made out that case. A very strong case has been made out against nationalisation. To that the Government have made no answer because there is no answer. I greatly fear that if the Government force through this nationalisation Bill they will have taken yet another step to make the industrial recovery of this country more difficult. I feel most strongly that, unless a halt is called to this folly, 10 years from now the people of this country will look back upon the legislation carried through from 1945 to 1950 and say that this was the most disastrous period of legislation which this country has ever seen.

8.56 p.m.

Mr. Monslow: The hon. Member for Stockport (Sir A. Gridley) has by implication given us the usual theme which has characterised most of the speeches we have heard today from hon. and right hon. Members opposite, that if the Government would drop the nationalisation of this great o basic industry, they would have the complete support of the Tory Party in relation to their other legislation. [HON. MEMBERS: "Do not believe it."] In a moment I will demonstrate that I do not believe it. This is a mere smokescreen, for we have witnessed in the lifetime of this Parliament, as in the past, an Opposition which has frustrated every real and hopeful effort towards the betterment of social standards and the enrichment of our national life. Whatever may be the views on the subject-matter we are now discussing—the Iron and Steel Bill—we are all agreed that a plentiful supply of cheap steel is essential for the efficiency and prosperity of Britain. For the engineering exports on which our trade and employment depends, steel is a "make or break" question.
None of us can deny that there is in steel today a heavy proportion of obsolete equipment needing major overhaul and reconstruction. Again, there are many works to my own knowledge which sprawl—there is no other word for it—works which are a tangled riddle of gaps, corners, adjacent shops alternatively empty and overcrowded, illogical separations, unbalance and tortuous, routes and methods in the handling of materials. The works where these things exist are undoubtedly works which are old and have too much of their history incorporated in their lay-out, and some of them are reaching a stage where major reconstruction is imperative, and capital expenditure is needed unless we are to have scrapping and building upon entirely new sites. I am not, unmindful that capital expenditure plans have been approved by the Iron and Steel Federation but I want to indicate tonight that the programme is really inadequate to modernise the industry. It means merely tinkering and patching and leaving untouched the basic inefficiency and the unbalance of the industry.

Vice-Admiral Taylor: The hon. Member has made a statement which is not correct. The plan was put forward by the industry and approved by the Government.

Mr. Monslow: The hon. and gallant Member is too blind to see the obvious. That is exactly what I said.

Vice-Admiral Taylor: No, the opposite.

Mr. Monslow: Since criticism has been directed against the Government policy in respect of steel, let us examine the result of Conservative steel policy in the past. It has conferred enormous advantages on the business men of the industry who have been granted a monopoly, who have been assured of its exclusiveness and permanence, and who have been encouraged to use it to raise the prices of their products. That policy has undoubtedly put large profits in the pockets of the steel holders. It is equally beyond question that at least some of these profits have come out of the pockets of the consumers of steel, who include, directly or indirectly, almost every inhabitant of the country. The return which the community has received could hardly be detected with a microscope. This industry

in the past, unquestionably under the domination and control of the Iron and Steel Federation, can well be described as one of the tightest and most drastic monopolies which the country has ever known. It has been a perfect ramp. It has stabilised its own profits by unstabilising the economic system. I congratulate the Government upon their courage in the decision they have taken to nationalise this great basic industry which, as a result of the pernicious practices of the Steel Federation in the past, has placed many of our people in poverty, destitution and despair.
I remember vividly accompanying that energetic, noble personality the late Member for Jarrow, known to, many of us in this House as "Wee Ellen," to a May day demonstration in 1936. We walked through the centre of the town to the park and talked with many of those men, then only about 45 years of age, who had not worked for five years. At that time 80 per cent. of the town population was unemployed, due to the policy of National Shipbuilding Securities, Limited. I remember, too, that Vosper Salt, the great American who was interested in steel, made representations to Brassett and Company, the steel consultants, to set up a syndicate. The money was raised but the plan was opposed by the Iron and Steel Federation, in spite of the fact that there were thousands idle in the streets with no hope of jobs, and poverty reigned in every home in Jarrow.
I want to ask the Minister tonight to look not only at the economic and financial implications of this problem, but also to recognise the great social problem involved. In my constituency there is a works, taken over by the Ministry of Supply in 1943, which employs 2,000 men. As a result of the bankruptcy of private enterprise in the past, that plant is now obsolete. Capital expenditure is needed there so that the craftsmen of Barrow can make their contribution to the economic restoration of our country, as they helped during the days of war.
I suggest that when we look at these problems they will be examined not only in the light of the grave economic problem which is before us, but that we will accept their social implications as well, and that, when we nationalise this great basic industry, we will never again condemn our people, as under private exploitation in the past, to the misery and


squalor which they had to endure in those days. I am confident that in taking on this great new adventure we can look forward to the co-operation and collaboration of technicians, managements and workers to place us in a more fortunate position than we have enjoyed under the domination of the Iron and Steel Federation.

9.5 p.m.

Mr. Hugh Fraser: The hon. Member for Barrow-in-Furness (Mr. Monslow) has given us a very interesting speech in which he talked mainly about Jarrow. I am sure it has been of interest to us all. I suggest, however, that it is really outside the scope of the Bill and more what I believe the Marxists, in one of their quaint phrases, refer to as a morsel of personal prejudice and anectdotism which no longer refers to the means of production as current. Surely the answer to the hon. Member's speech is simple and the Chancellor of the Exchequer has it. It is that this nation cannot at present afford to spend more than a certain amount of money on capital reconstruction, and that reconstruction is already agreed to in a plan put forward by the British Iron and Steel Federation.
Let me direct my remarks to the speech made today by the Minister. I think that his speech in introducing the Bill, was one of the most sententious we have ever heard. He put forward what is probably the major issue so far undertaken by the Government. I must confess that I could not listen out his speech completely and when the right hon. Gentleman turned his remarks to the question of compensation I left, thinking that this was, indeed, a case where he should have "asked his Dad" about Stock Exchange prices.
The questions which emerge from the Minister's speech, in which was proposed the nationalisation of what is after all, the iron lung of British recovery, are extremely interesting. As every hon. Member who has spoken this afternoon has admitted, iron and steel are the trades on which our recovery depends more than on any others. I should like to take up certain points which the Minister made. He pointed scornfully at these benches and said that we were divided, that we were unable to put up a case owing to party differences. After listening to the case put forward by my right

hon. Friend the Member for Aldershot (Mr. Lyttelton) and my hon. Friend the Senior Member for Stockport (Sir A. Gridley), he will have seen that we do have a case. But we on this side know full well that on the other side there are considerable party differences about this Measure.
After all the abstruse, academic and prejudiced writings of the party opposite during the last 20 years, its writers and those who absorb its pamphlets must find that, after a period of two years of almost mountainous gestation, this Bill is, indeed, Strauss's mouse, a mouse, however, which has enough meat on it to keep the rats on board a sinking ship. That is a mixed enough metaphor, I know, but this is a mixed enough Bill. Let me remind hon. Members opposite—and I am sure my remarks will be appreciated by the hon. Member for Wednesbury (Mr. S. N. Evans)—that in nature and according to Darwin, semi-hybrids almost always prove sterile. This applies precisely to the Bill. It is a semi-hybrid and a Bill which is almost certain to prove sterile.
The Minister talked about party differences. It must seem very strange to hon. Members opposite, who believe that one of the reasons for the nationalisation of steel was the nationalisation of armaments, to find that Vickers are outside the group of firms to be nationalised under this Measure. They must find it strange that this great attack on the steel barons does nothing more than perpetuate the steel barons so long as they behave themselves. Hon. Members opposite might find it very strange, but although they have gained the goodwill of the Minister of Health they must also remember that goodwill, by modern methods of accountancy, is an asset which should immediately be written down to zero. How long it will last is a matter for them to judge.
The Minister said that the reason for getting rid of the Steel Board was because the Board were incapable of directing the industry to take positive action. It had negative control, but no system of Government control, so long as ownership and control were kept separate, could ever lead to positive action. The right hon. Gentleman and other hon. Members have amazed us during the last two years by their lack of any constructive ideas on the steel industry. Why is there this sudden


welling up of ideas on a matter on which they have shown themselves sterile and ignorant? There has been the question of their timetable. One Bill had to be withdrawn before it saw the light of day. This afternoon the Minister said, "We are considering the question of subsidies." If they have been considering that question for two years, surely they should be almost at the end of their consideration and should have reached a conclusion on the topic. On the question of plans, all they have been able to do is to accept plans put forward by the industry. Yet they solemnly say that control and ownership must be united, because unless they are united there can be no positive action. They have shown themselves incapable of action or direction for two years.
What the Government are setting up is nothing more nor less than a holding company. In the old days there used to be attacks on holding companies, the type of holding company set up by Rockfeller, Hatry and Kreuger, which were described as blood sucking organisations. They are setting up such an organisation which obviously is incapable of dealing with the kind of——

Mr. Mitchison: Will the hon. Member allow me——

Mr. Fraser: No, I will not; I have only five minutes. There are two possibilities. On one side, there may be a holding company which will stifle and overcome progress with red tape, and, on the other hand, is the possibility of setting up a holding company which will be unable to do anything at all, in which case how much better if it had never been set up. On one hand, there is the mort main of a holding company and, on the other, an incompetent, abstruse company which can make no decision.
I wish to turn to what is likely to happen in the interim period. We believe on this side of the House, and I believe many hon. Members opposite secretly believe, after the Edmonton by-election, that the decision of the people will eventually be against this Bill. But for 18 months, until May 1950, there is to be set up by the Bill a period during which the industry is to be grievously handicapped. Of that there is no question. Hon. Members opposite may say, "It does not matter, we will wait until 1950 and between now and 1950

we have time to think out plans." Let us consider what the effects of the Bill are likely to be during those 18 months on the industry which, we all agree, is the iron lung of British recovery, apart from the general confusion caused over the whole industry, on which I would quote the words of Lincoln Evans published in one of the daily newspapers today. He regarded it as a great misfortune that the political arena should be moved bodily into the factories, the rolling mills and steel shops for the next 18 months, while the country and those industries are attempting industrial recovery.
On the labour side there is bound to be difficulty. That team spirit, great though it is, is in danger of being disrupted during the next 18 months. More especially are their problems perhaps on the managerial side. When one looks at this question one sees the sort of things which are likely to occur. This afternoon the Minister went even further in talking about what he called his schemes of evacuee or expellee firms being able to remove certain sectors under their control from the grip of this Bill. It is fairly obvious that a great deal of time will be spent by firms—the direction of firms, and the brains which make the firms go—in thinking out various and devious ways of removing themselves from this rare privilege of being administered by the Minister of Supply. It is certain that time which should be spent on considerations concerning re-equipping and reorganising will to some extent be dissipated in political considerations. Even if it does not happen, and it may not because I believe that the people in the steel industry both on the managerial and steel workers' sides are such a fine type that it may not, let us face the fact that these temptations are being put before these people. These troubles may arise.
We have to take the other case. In these circumstances what will be the main interest of managements? It will be—and the Minister of Supply this afternoon talked of this danger of schizophrenia, he used this rather extraordinary and wild word in this sense—a question of a conflict of loyalties. Can there be anything but a question of loyalties today, when the fate of this industry depends, not upon the choice of


this House but on the General Election? How is it possible for directors of businesses not to bear in mind considerations of a political character?
To turn to the punitive Clauses of, this Bill, I would refer to those which impose upon directors fines for any dissipation of assets. When any risk is taken in a business it raises the question of a possible loss of assets, the possible dissipation of assets. Is the Minister to judge these things? The Minister has up to now proved himself incompetent to judge anything to do with the iron and steel industry. It means inevitably that there will be a hold-up on that account. Apart from its long term effects—the setting up of this holding company, in which I assume there will be plenty of "jobs for the boys," though looking at the benches opposite I wonder whether there will be any boys for any jobs—doubts will undoubtedly be cast during the next 18 months—whatever the result of the next General Election—on the management and on the relationship between management and workers.
What are we obtaining in return for this Bill? What guarantee have we, what guarantee can the Chancellor of the Exchequer give us, that any more money can be spent on the reconstruction of steelworks in this country than is going, on at the moment? Is that general programme which the Chancellor has already accepted to be unbalanced? What guarantee have we that more steel will be produced or that there will be any price system which will see that the people of this country and this country's clients abroad get cheaper steel? Everything seems to point in the opposite direction. The only advantages that can be gained by this Bill are clear. They are to hold together a party which is disintegrating within itself, to keep a few dissident members in the Government, and to provide something of a united front for a ship which is on the verge of wreck and for a body of politicians we see opposite, who no longer have the confidence of this country.

9.20 p.m.

Mr. Mort: I listened with great pleasure to the hon. Member for Stone (Mr. H. Fraser). If he had anything to do with the practical side of

the steel industry I do not think that the furnaces would ever lack heat. My purpose is to bring, shall I term it, the atmosphere of the workshop into this Debate. Compliments have been paid to the workers and I wish to bring in the atmosphere of the workshop. I think I am entitled to do so and capable of doing so as I have spent 30 years in steel works. I have also had the privilege of visiting all the important plants in this country.
I was in the steel works in the bad old days and I would like to bring to the House the approach of the ordinary worker both to the technical and to the workers' side. Facts have been given to the House about the past, and I am certainly not satisfied with what happened between the two wars. In that period, as employee, I suffered unemployment and low wages and was driven from pillar to post because of the incompetence and incapability of the employers to seize the opportunities that they had at that time. Why was not that done? It was not done because there was no co-ordinating influence. Everyone connected with the trade will know the truth of what I am saying. There was no coordination. In fact, after the tariffs were imposed, after two years had passed, there was "The Times" warning to the employers that if they failed to take re-organisation seriously, they could hardly expect the public or the Government to view their inactivity with indifference.
I am quite prepared to admit that a lot of progress has been made. We now have in this country some of the finest plants in the world. There has been erected in Margam, in South Wales, the finest plant in the world. What is the result of the imposition of tariffs and the formation of the iron and steel trades Federation under the expert guidance of the right hon. Gentleman the Member for the City of London (Sir A. Duncan)? We have created in this country a monopoly, unexampled, uncopied, and which cannot be surpassed in any part of the world. No one will deny that. The problem we have to face today is whether we as a nation can take the risk of allowing this great industry that affects the standard of life of our people to be controlled and managed by a separate body of men not responsible to the Government. That is


the problem—whether the monopolists are going to rule this country or whether this country is going to rule the monopolists.
We have had many complimentary things said today about the trade. They are all very true and it is appropriate that they should be said. Special mention has been made of industrial peace and record output. Let us examine why these things have happened, because there is a moral in it. We have peace in this industry because of the trade union organisation which operates within the iron and steel industry. I would pay tribute to two trade union leaders, the finest leaders this world has ever seen. One was John Hodge, and the other was Sir Arthur Pugh. These are the men who have laid the foundation of an organisation which has been accepted by the employers. The result is that we have had no disputes in the industry for many years. These were not bequests, they were conquests.
Although we have not resorted to war in the steel trade, I hope that the House is not under the impression that, through all the years, everything has been peaceful and that the employers always met us at the door and were willing to give us what we asked. The reason why we have had no disputes is that it is a wise general who assesses the strength of his opponent. The employers meet us now round the table and we discuss our problems with them. But I can remember the time when I represented the men and I was not allowed to sit down in the presence of the manager. I have headed deputations and we have stood talking to the manager for an hour. He was the only man in the room who sat down.
Those conditions are gone. These blessings which we have gained were not conferred upon us. We fought for them. I am prepared to pay compliment and to say a good word to the employers in the industry now. They meet us round the table and negotiate with us. One of the reasons why hon. Members opposite may ask whether the workers in the trade want nationalisation has already been explained. It has been said that the steel worker is not so loquacious as workers in other industries. He is not a talker. Because he has not been shouting from the roof tops, possibly some people may think that he is indifferent. In fact, the hon.

Member for Stone almost suggested that something terrible would happen in the rolling mills and in the furnaces if this Bill is approved. I assure the hon. Gentleman that nothing of the kind will happen. The reason for the record output is that the workers have voluntarily worked the extended week. They were not asked by the Government to do that. A significant point which should be remembered is that the agreement to work the extended week was reached at a time when other workers were asking for a shorter working week. The miners had just been given a five-day week. Yet, in the face of that, the steel workers said, "Owing to the condition of the country we will work an extended week."
What about the future? Those who know anything about the trade are convinced that there must be a large integrated chain throughout the country. The industry must be planned as a whole and the trade must be applied to the most profitable and economic places. Who can do that effectively? Everyone must agree that we must have a national power vested in the Government so that everything can be planned and arranged. That is my view and it is the view of the workers in the trade. We must get in on the ground floor. [Interruption.] Yes, the men must not wait for orders to come in with the post in the morning; we must get agreement around the table beforehand. That is the idea behind this Bill. It may be old-fashioned, but we on this side of the House still believe that the earth is the Lord's, and the iron ore thereof. This nation wants, above all things, security, stability and protection against the cold winds of uncontrolled economic forces. Our people are not afraid of governmental action, but rather consider it a natural means of protecting themselves against economic hazards.

9.31 p.m.

Mr. Osbert Peake: The hon. Member for East Swansea (Mr. Mort) made, I thought, a most interesting speech, speaking with an expert knowledge of this industry, which I do not possess, at any rate from one angle, and as he spoke I could not help reflecting that his manner even more than his matter was a tribute to the excellent relations which have existed between employers and workmen in the iron and steel industry.
The hour is getting late, and it is not possible—nor would the House tolerate it if I were so to attempt—to develop an argument against the whole of this Bill. My right hon. Friend the Member for Aldershot (Mr. Lyttelton) covered a great deal of ground this afternoon, and rightly and wisely remarked that this Bill is a new model in nationalisation. I shall address myself to only two or three of the points which are novel in this Bill, and which I regard as of outstanding importance. It is a new model because it attempts to retain the advantages of the present system and organisation of the iron and steel industry whilst fulfilling the pledge given in "Let Us Face the Future" to bring a large measure of public ownership into the iron and steel industry. It seems to me that it is neither fish nor flesh, but only good red herring. It seems to me also to have more inherent vice than any of the nationalisation Measures preceding it.
The first respect in which I think this Bill is subject to very serious criticism is on the question how the Iron and Steel Corporation, to be formed under the Bill, will exercise its functions. The method adopted in the Bill is, of course, the compulsory purchase of the stocks and shares and loan capital of 107 companies. When the Minister presented the Bill he gave the Press a summary of its provisions, a copy of which for greater accuracy I have brought with me. On the first page of that note we find the following:
On vesting day when the Corporation takes over securities the sole immediately perceptible difference will be that the company directors and workers will be responsible not to private shareholders but to one great shareholder, the British public.
When, however, we turn to the Bill, we find that the duties and powers of the Corporation are laid down in Clauses 2 and 3. I will refer only to the general duty of the Corporation and not to its specific powers. It is laid down in Clause 3 that:
It shall be the general duty of the Corporation so to exercise their powers as to secure that the products of the activities specified in the first column of the Second Schedule to this Act are available in such quantities, and are of such types, qualities and sizes, and are available at such prices, as may seem to the Corporation best calculated to further the public interest in all respects.
That general duty is in no way compatible with the role of shareholder as we know

it in this country at the present time. These duties are entrusted, under our company law, to the board of directors, and shareholder's rights are, of course, prescribed by the Companies Act and by the articles of association of the particular company concerned. But in order to exercise these duties the newly-formed Iron and Steel Corporation will have to engage in constant day-to-day interference with the management of the 107 companies; for how otherwise will it be possible for them to prescribe the quantities of products which are to be produced, as well as their types, their qualities, their sizes and the prices at which they are to be sold? These are all matters which normally fall to be settled by a board of directors, and there is only one way I can see that the Iron and Steel Corporation can carry out the duties laid upon them by Clause 4 of the Bill, and that is by exercising the threat against directors and chairmen of the 107 companies, and against the managing directors and executives, of giving them the sack. That is the only thing which they can do.
In the ordinary way, of course, directors enjoy a certain amount of protection and immunity from attacks by their shareholders. A certain amount of formality has to be gone through before dissatisfied shareholders can get rid of any or all of their directors. If Members look at the Eighth Schedule, they will there find that the Companies Acts are modified in such a way as to give the Iron and Steel Corporation absolute powers. All the provisions of the Companies Acts regarding summoning of meetings, the amount of notice required, the voting at meetings and so on, are short-circuited by the Eighth Schedule, and it actually empowers the Corporation itself to call at any time a general meeting of any of these 107 companies and at that meeting to proceed to dismiss directors and appoint new ones in their places. That is how the Iron and Steel Corporation will exercise the duties placed upon them by Clause 4 of the Bill.
It is a very bad thing, in my opinion, for the only weapon of control to be to give someone the sack, because it is a very strong sanction to have to apply. Moreover, if that is the only sanction, you do not get good service, as there is no security of tenure. How much


greater would be the difficulties of the Prime Minister for example if his only power with his colleagues on the Front Bench was to dismiss them. Of course he has that power, but he has a very great many, some of them very happy, alternatives. As the Minister of Supply well knows, Ministers can be moved sideways; they can be moved upwards; and they can be translated to another place—there are all sorts of alternatives which a Prime Minister can and does use. But if the only power which the Iron and Steel Corporation is to possess is the power to sack, then I do not believe they will either secure or retain the services of first-class executives in these 107 companies. I believe that if the directors and executives of these companies do not prove themselves to be complete "Yes-men," they will be sent elsewhere.
The second great flaw in this Bill is the question of discriminatory competition, which was referred to by my right hon. Friend the Member for Aldershot. At every stage of production, right through from the iron-ore, the raw material, to the finished article, there will be outside independent producers and manufacturers. In some cases they will have to be licensed, and in others they are not to be licensed. Whatever happens to this great trade in future, let us suppose that the demand for steel is temporarily reduced. Then the iron-ore mines which belong to the Corporation will be kept going full time, and the mines belonging to the small independent producers will be the first to be closed. Can anyone doubt that the Corporation will look after its own interests, and its own allies, first and foremost? If, on the other hand, there is a shortage of finished or semi-finished steel products for certain purposes, can anyone believe that the finishing works owned by the Corporation will not receive preference over those which are outside and independent of that great and all powerful body? It is obvious to me that what I may call the ebb and flow of the tide of trade will have to be taken up by the independent firms.
Now I come to another subject, compensation, on which several speeches have been made today, and on which the main speech from this side will be made tomorrow by my right hon. Friend the Member for the Scottish Universities (Sir

J. Anderson). I am sure we are all agreed that it is vital that justice should seem to be done. The Government and State will have bought the iron and steel interests very dearly if half a million shareholders have a burning sense of injustice in consequence of the terms of purchase. More important, however, than that justice should seem to be done is that pledges should be honoured.
I do not want to deal with the question of Stock Exchange prices as a basis of compensation, except to say that it is ridiculous to suppose that they represent bargains at the present time between willing buyers and willing sellers. That is probably never wholly true, because there are always a number of forced sellers in the market, forced sales in progress, of the kind necessitated by Estate Duty and things of that kind. There are possibly a few forced buyers who, under a trust or settlement, are compelled to invest, but when the Chancellor has just imposed his "once-for-all" capital levy, which is payable in six weeks' time, and when investors and trustees are going through their folios of investments to see what they can sell to "raise the wind" to pay the Chancellor on 1st January, it is a little fantastic to say that the bargains on the Stock Exchange in October of this year represent arrangements between willing sellers and willing buyers.
The really important point on this question of compensation to which I wish to turn for the few minutes that remain to me is this question of a breach of faith on the part of the Government. Two and a half years ago, on 27th May, 1946, the then Minister of Supply, the right hon. Gentleman the Member for Deptford (Mr. Wilmot), announced the Government's decision to nationalise important sections of the iron and steel industry, and he proposed a Motion in the following terms:
That this House approves the decision of His Majesty's Government to bring forward proposals for transferring to the ownership of the nation appropriate sections of the iron and steel industry with a view to its efficient organisation in the public interest.
In the course of his speech he gave an assurance to the industry. Of course, he feared that the announcement of nationalisation would result in a slowing up or retarding of the great development plan which was calculated at that time to be going to cost £168 million.
This was his statement:


On this question of capital development, the most important aspect of the whole matter. I would like to give the industry an assurance about the future—about future expenditure on approved development schemes—pending the putting into effect of the Government's proposals. We are most anxious that the industry shall proceed energetically, and I feel sure that they will, with those urgent measures which are so necessary for the country's recovery. Many of the firms have already started, and others are ready to start.… There must be no slackening of effort, and the Chancellor of the Exchequer, who as I have said, will be speaking tomorrow, has authorised me to assure the industry that whatever the final method and basis adopted,—
those are the important words:
that whatever the final method and basis adopted, proper allowance will be made in assessing compensation for the results of any expenditure incurred from now onward, on approved schemes of development or rehabilitation. This assurance will, I feel sure, enable the individual firms to proceed.… The big companies in industry are playing the game, as we knew they would.
On the following day that pledge was reinforced by the then Chancellor of the Exchequer, now the present Chancellor of the Duchy of Lancaster. He said:
My right hon. Friend the Minister of Supply said yesterday—and I quote his sentence so as to emphasise it and associate myself with it—speaking of the interim period and the work of that time: 'There must be no slackening of effort and the Chancellor of the Exchequer … has authorised me to assure the industry that whatever the final method and basis adopted … proper allowance will be made in assessing compensation for the results of any expenditure incurred from now onward, on approved schemes of development or rehabilitation'."—[OFFICIAL REPORT, 27th and 28th May, 1946; Vol. 423; c. 838, 853, 854, 1004.]
The right hon. Gentleman endorsed this pledge to the industry, and we must bear in mind that at the time this event was happening we had before us the Coal Industry Nationalisation Bill. In that Bill there was a whole Clause, running to about a page and a half, which provided for repayment to the colliery undertakings, in accordance with a similar pledge given by the Government as soon as they came to power—a similar pledge to repay what we described in the Act as "capital outlay refunds." That Measure was before the House when this question was debated, and it was in those circumstances that this definite and wholehearted pledge was given by the Minister of Supply two and a half years ago and endorsed by the then Chan-

cellor of the Exchequer. Why was the pledge given? Obviously to allay uncertainty and encourage re-equipment and development in the interim period as well as assuring that the peach would continue to ripen on the wall. My right hon. Friend the senior member for the City of London (Sir A. Duncan) remembers that allusion. The peach, however, under the tender care of the Government is going to be valued as a lemon.
What did the Government fear if this pledge had not been given? They obviously feared that the directors of these companies, being under some sense of duty and responsibility towards their shareholders would, with the threat of nationalisation hanging over their companies, go slow upon the development plan. They might even have increased the distributions to their shareholders, instead of husbanding their resources for the purposes of the new development. All this would have been very bad, of course, for the nation as a whole. It was essential in the national interest, that this assurance should be given.
The industry accepted the pledge at its face value. The development plans went full steam ahead, although the directors realised that the shareholders could get no benefit from them for a number of years. That is exactly what happened. The big companies—and I may add also the small companies—to quote the right hon. Member for Deptford, all played the game. This development plan was estimated to cost £168 million. Owing to the rising costs, it is now estimated that the figure is £200 million. From time to time during the last two years the Minister of Supply has told us how this plan has been getting on. In May, 1946, we were told that 27 schemes had been licensed and approved, to cost £16 million, and that 20 other schemes had been approved, to cost £48 million. A year later there was a list in HANSARD of the schemes approved by the newly-formed Iron and Steel Board.
On 19th April this year there was a further list of no fewer than 526 schemes, examined and approved by the Board. No exact estimate is possible of the amount of money, the spending of which has already taken place or to which the industry now stands committed, but on the basis of £200 million for the whole


plan the figure given by my right hon. Friend today of £100 million as the amount which the industry is spending or is committed at the present time to spending, is no under-estimate of the position. So far the industry has, in the main, been using its own resources, and not newly borrowed capital, for the purpose of these development plans.
The irony of it all from the point of view of the shareholders—may I say that I do not own a single share in any iron or steel company?—is that for all this new development, which has pegged down dividends and prevented Stock Exchange prices rising, the industry has been graciously accorded by His Majesty's Government priority of licences. It has even been made a reproach against the industry that it needed priority of licensing in order to get on with the job. Never has a fly walked, or flown, so innocently into the spider's web. The industry fell completely for the assurance given on 27th May, 1946.
Can anyone say that the Government's pledge is being fulfilled in the compensation Clauses of the Bill? The stockholders have had their dividends stabilised and vast sums of the shareholders' money have been embarked on schemes, the whole benefit of which will accrue to the new shareholder, which is the Iron and Steel Corporation. To ensure that this is so and to ensure that the existing shareholders get nothing whatever out of all this money which has gone into the development plan, there are about six Clauses on about 12 pages in the Bill to prevent the directors giving anything which may accrue from these development plans to the shareholders. There are Clauses against imprudent contracts; there are Clauses penalising the directors for the dissipation of assets; and there are Clauses prohibiting increases of dividends over the next 18 months. Every one of those Clauses is designed to ensure that the Government shall reap what the directors for the last two years have been sowing for the benefit of the present shareholders.

Mr. John R. Thomas: Would the hon. Gentleman allow me——

Mr. Peake: No, I will not give way. I have only three minutes. The hon. Member must make his speech tomorrow.
What possible defence to this charge of breach of faith can be put forward on behalf of the Government? I hope that the Chancellor will deal with this matter himself tomorrow. I advise him not to leave it to the right hon. Gentleman sitting beside him, the Secretary of State for Scotland, because he made such a terrible mess of a similar charge about nine months ago. The Secretary of State for Scotland blurted out the truth. All credit to him for so doing. However, I advise the Chancellor to handle this matter personally and not let any of his back benchers get in on it before him It would be interesting to know what the right hon. Member for Deptford would have to say about this. After all, he gave this pledge in these unqualified terms, which were endorsed by the Chancellor of the Duchy of Lancaster. I am sorry to say that I have not seen him in his place all day. Perhaps he will attend during the remaining two days' Debate on this Measure. [HON. MEMBERS: "He is about."] Evidently he has been seen about the premises. Let us hope that we shall have the benefit of his presence before the Debate concludes.
Can it be said in defence that the Government are buying up not the company's assets but the shareholders' shares, and that the pledge was given to the companies and not the shareholders? Alternatively, will it be argued that the Stock Exchange prices reflect not only present returns but future prospects, and that the shareholders of these concerns will in fact get something for the vast sums—£50, £60 or £100 million—which have gone into the development of the iron and steel industry in the last two and a half years? Those arguments will not stand up for these reasons. First of all, the pledge was given with the qualification that proper allowance would be made "whatever the final method and basis adopted might be."
In the second place, statistical evidence completely disproves that investors have discounted the future prospects of iron and steel companies at the present time. Actually the yield on ordinary shares of iron and steel companies is higher, and the prices therefore lower, than the yield and prices of industrial shares taken as a whole. The Actuary's Investment Index for 30th September, shows a return on the leading 18 shares in iron and steel


companies of 5.31 per cent. against 4.94 per cent. for industrial ordinary shares taken as a whole. That proves conclusively, first of all that iron and steel shares are not standing unduly high on account of future prospects but are in fact standing unduly low because of the threat of nationalisation.
In conclusion I say that this is a Measure for promoting uncertainty and disturbance within industry and embittering the clash of political and public opinion——

It being Ten o'Clock, the Debate stood adjourned.

Debate to be resumed Tomorrow.

WATER (SCOTLAND) [MONEY]

Resolution reported:
That, for the purposes of any Act of the present Session to amend the law with respect to rating and charging for water supplies in Scotland; to amend Part V of the Local Government Act, 1948, with respect to the ascertainment of the standard amounts thereunder in Scotland; to increase the financial assistance that may be given to local authorities in Scotland under the Rural Water Supplies and Sewerage Act, 1944; and for purposes connected therewith, it is expedient to authorise the payment out of moneys provided by Parliament of—

(a) any expenditure attributable to any provision of the said Act of the present Session increasing to twenty million pounds the aggregate amount which the Secretary of State may expend in making under section one, as read with section seven, of the Rural Water Supplies and Sewerage Act, 1944, contributions towards the expenses of local authorities for rural water supplies and sewerage; and
(b) any increase in the sums payable out of moneys so provided under Part II of the Local Government Act, 1948, attributable to the said Act of the present Session."

Resolution agreed to.

CLUB CATERING LICENCES

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Snow.]

10.1 p.m.

Mr. Maude: I rise to draw attention to a matter regarding the food distribution of this country as affected by the grant of licences to clubs. It is my submission that the facts which I am

able to tell the House show a scandal that ought to be disclosed and should have been remedied a long time ago.
May I remind the House of what the position is at the moment so far as the Ministry is concerned, in the distribution of food? The material comes from letters which I have received from the hon. Lady who is to reply. First, owing to the necessity to save food there has to be a control of food. That control is exercised by the Ministry of Food and amongst other bodies that are controlled are clubs. The relevant order is the 1948 Order No. 368. Catering licences are needed and one cannot get a catering licence, as the correspondence reveals, unless the club shows one of two things: first, that it cannot function efficiently without it; or secondly, that it is able to show that there would be hardship owing to lack of local facilities.
In any event the proper procedure is to go before a local committee, which appears to consist not of civil servants and not to be under the control of the Ministry of Food—that is the food committee. If the applicant, that is the club, is successful, then the matter goes to the local food officer and he or she, I apprehend, is a civil servant under the Ministry of Food. It is the rule of the Ministry in the case of a club, for the matter to be referred thereafter to the divisional food officer before the club gets its facilities. Obviously, that is the check designed to ensure that everything is above-board and fair so far as these officials are concerned.
What has happened in my constituency? In Exeter, so far as I know—unless something has happened about which the hon. Lady has not told me—I apprehend that even tonight there is a Civil Service club which has been started recently in the City. That club made an application to the food committee and the matter went forward to the local food officer. The Minister agrees, on the correspondence, that the licence should never have been granted, and the reasons given in the correspondence for saying so are, that the two primary conditions have not been fulfilled—that is to say, no case has been made out to show that the club cannot function efficiently without the licence; secondly, no case of hardship has been made out, of lack of local facilities.
The fact that the licence should have been granted was in itself bad enough, but it is an abominable state of affairs that the matter was, in fact, never sent to the divisional food officer at all and the correspondence reveals that the check was never imposed. So we get a situation where civil servants have allowed—it is absurd and fantastic to say "under their noses," because they must have known perfectly well—a food licence to be passed and to come into existence in the city for a club for civil servants, without enforcing the law and seeing that the policy of the Ministry of Food was upheld.
When my attention was drawn to this matter and I took it up with the hon. Lady, what answer did I get? I got an answer from her refusing to revoke the licence of the Civil Service club, which I had called upon her to do. I asked that it should be revoked and said that it was quite wrong it should ever have been granted, and as they were responsible for the distribution of food and had power to revoke, they ought to revoke this licence. Nothing of the sort. My request was refused and in the letter which I received on 20th October last the hon. Lady said:
You also ask why, once a licence has been granted, it cannot be revoked unless its terms are infringed. It is within the power of the Minister to revoke any licence issued under his authority but such power must obviously be used with the greatest circumspection, and, since the inception of licensing, Ministers of Food have restricted the use of their revocation powers to cases where people have been considered as unsuitable persons to carry on distribution. Further, would it not be unjust to revoke a licence which was obtained in good faith although through an error on the part of this Department.
As far as I am concerned—and I hope that the House and people outside it will agree with me—it is absolutely essential that the Government should behave in such a way—as, for instance, the Attorney-General was saying today and has said again and again in other places—that justice should manifestly be seen to be done. This Ministry has absolutely no right whatever to allow a state of affairs to exist where it is possible to say, and rightly to say, that, in fact, the civil servants are in possession of a licence which should never have been granted. The civil servants know perfectly well that that licence ought not to have been

granted. The Minister of the Crown knows perfectly well that his senior officer never saw the matter. A Minister of the Crown cannot defend the position in any shape or form by saying: "We never have stopped this sort of thing and, indeed, it would be unfair to do so."
I will deal with my case rapidly, Mr. Deputy-Speaker, because my hon. Friend the Member for Northwich (Mr. Foster), if he is fortunate enough to catch your eye, has a similar matter which he would like to mention and about which notice has been given to the hon. Lady. In Exeter, we applied for a food licence for the Heavitree Conservative Club. But the local food committee would not pass it. I took the matter up with the Minister and pointed out there were no local facilities that could possibly be called sufficient. We received an answer dated 13th September stating that:
Because of the continuing need to save food we can only issue catering licences to clubs, where it is evident that the club concerned cannot otherwise function efficiently and where in the absence of catering facilities members would be caused hardship. The Food Control Committee refused the application … under the above policy and also because they considered that existing catering facilities were adequate to meet the needs of people visiting and living in the district.
Then comes this significant passage:
As regards the Civil Service Club, it appears that the granting of a catering licence restricted to the supply of snacks was agreed to by the Local Food Authorities who were undoubtedly generous in their interpretation of the rules in this instance. We cannot of course regard this as a precedent when considering other cases and as we have been compelled to refuse many applications for licences from clubs throughout the country there is no justification for making an exception in this case.
I wrote back saying that this was monstrous, that:
It is a … considerable annoyance to find that the local food authorities were permitted to be `undoubtedly generous' in their interpretation of the rules …
and I asked her to explain. I received another letter, and the House will realise that so far, it had not been disclosed to me in the correspondence that the local civil servant had not passed the matter on to the divisional food office. The blame had been laid upon the civilians, who had been rather stupid and had been allowed to be rather over-generous. On 8th October I got another letter from the hon. Lady:


I am sorry to say that my enquiry has shown me that the rules which are laid down for the grant of catering licences have not been properly applied in this case. I need hardly say I have taken steps to prevent this happening again. The rules preclude the grant unless it can be shown that catering facilities are necessary to enable the club to function efficiently and that hardship would be caused to members by the refusal of a licence.
She then goes on to say that two blacks do not make a white, and so on. I was not satisfied and wrote a rather harsh letter:
You will forgive me saying that this appears to me perfectly iniquitous. Surely it is the duty of the Ministry of Food to protect the public and it seems outrageous that some official or officials should commit an act which leads to the maldistribution of food and that nothing should be done about it.
If the hon. Lady says tonight that something has been done about it and that some civil servant has been punished, I should like to know how. I would point out that it is absolutely insufficient to say that a civil servant has been punished, while in that city there are licensed victuallers wishing to serve more food and there is this flourishing club, within 200 yards where a licence has been refused, and the Ministry and the Minister know the Civil Service club ought not to have its wrongly granted facilities. The hon. Lady wrote:
Clearly, we are obliged to rely to a great extent on the local knowledge of Food Control Committees, but their recommendations in the case of clubs should be forwarded to the Divisional Food Officer for a final decision. Unfortunately, the case of the Civil Service Club was not submitted to the Divisional Food Officer, and a licence was granted by the local Food Office solely on the strength of the Food Control Committee's recommendation. As I said in my last letter, steps have been taken to see that this does not happen again.
I do not want to leave out anything which would be unfair to leave out and I think I ought to say that the hon. Lady also says:
some errors are almost bound to occur and one has unfortunately occurred on this occasion.
She refuses owing to the rule of anonymity to disclose who on earth was responsible for this. But if this sort of thing is allowed to happen in even one instance and the Civil Service are sheltering behind Ministers, it is monstrous.

10.12 p.m.

Mr. John Foster: The hon. Lady seems to have an unfortunate ex-

perience with Conservative clubs. Northwich Young Conservatives Club asked for a licence and I took up the matter and pointed out that the Gladstone—a Liberal Club I believe—had a licence. In this case I think it quite right that the Gladstone Liberal Club should have a licence and I think it is wrong that Northwich Young Conservatives Club should be refused a licence. Two blacks do not make a white. The hon. Lady wrote to me stating:
I find that the proper procedure laid down in our instructions for the granting of licences to clubs of this character was not followed and the Gladstone Club has received a licence which should not have been granted under our policy. There are, you will appreciaae, many thousands of applications for catering licences being considered by our local officers and I am afraid that it is impossible to avoid an occasional mistake being made. Our policy in cases of this kind, fortunately very rare, is to take disciplinary action"—
cane them, apparently—
against the officers concerned, but to allow the error to stand. We do not allow such cases to create precedents or to influence us in any way in considering other applications for licences of a similar type.
I then wrote and said that Weaverham Youth Club had a licence. In Northwich the trouble is not lack of facilities, but the total lack of facilities. In Northwich there is no single cafe which supplies a cup of tea or a bun after 8 p.m., and after 7 p.m. only one supplies a meal. How it can be said that there are facilities and that it is not a hardship on young Conservatives not to have a catering licence I cannot understand. I do not think the hon. Lady understands industrial conditions in the North.
The Young Conservative Club membership consists of people who have been working all day in factories. They invite people from neighbouring industrial towns to come and debate with them. They have speakers. They have to bicycle up to 10 or 12 miles to attend. The hon. Lady quibbled with me when I said that they had to travel those distances. She said that membership was for persons within a radius of five miles. She had forgotten that one has to travel both ways—there and back. I cannot understand her saying that it does not cause hardship to a club which has to have speakers and to which people bicycle a long way, to be unable to supply food. I wish she would investigate the conditions in Northwich, and if there is


no place which supplies food at the required times, how can she say that there is not a lack of local facilities? Would she perhaps look into the matter further and see whether it is only in the case of young Conservatives. Does she imagine that they attend in Rolls Royces after dinner or supper with champagne? If so, I cannot imagine that she knows what happens in an industrial constituency which happens to return a Conservative.

10.17 p.m.

The Parliamentary Secretary to the Ministry of Food (Dr. Edith Summer-skill): I think that both the hon. and learned Member for Exeter (Mr. Maude) and the hon. Member for Northwich (Mr. J. Foster) have been fair in their statement of the facts, but their approach has been a little emotional rather than rational. I must thank them for not having emphasised the political aspect of this matter. When I quote a few figures later I think they will agree that there is no question of political discrimination in the granting of these licences. I am sure that they and the whole House realise that this is perhaps the most difficult part of the work that we have to do in the licensing field.
We have certainly delegated our powers to officials in the different regions of the country. The hon. and learned Member for Exeter feels that this should not have been done, but this House would quite rightly have been the first to object had we tried to assess local conditions from Whitehall; if, for instance, my right hon. Friend and I, while being in a position finally to decide, should also have been in the position of having to consider just where these clubs were situated, what were the catering facilities in the neighbourhood, etc., and on that basis had decided the matter in Whitehall.

Mr. Maude: That is a complete travesty of what I said. Of course I do not object to delegation. I cannot expect the hon. Lady to be flying around everywhere in an aeroplane. But where, in fact, the Minister's delegates have done wrong, I am asking the hon. Lady to put that right, and to take away the licence.

Dr. Summerskill: If the hon. and learned Member will exercise a little patience, I will tell him why we have

adopted this particular procedure of not revoking the licence. We have delegated our powers because we feel that the people to whom they are delegated have local knowledge that we cannot possibly possess. In the case of Exeter Civil Service Sports Association, they did, as the hon. and learned Member said, apply to the local food control committee for a licence. It was considered and granted, but the food executive officer failed to refer the case to the divisional food officer, who in my opinion would probably have turned it down. But it was granted.
The food executive officer was certainly acting contrary to instructions. The House will agree that I have written a number of letters to the hon. and learned Gentleman in which I have not hesitated to admit these facts. He says that we should revoke the licence. What is the position? Any hon. Member here could have a small club—we do not ask what is the financial standing of any of these clubs—which applies for a licence, and the licence is granted. The executive committee of the club immediately makes arrangements to supply snacks or meals at the club. The hon. and learned Gentleman must realise that this does not involve an outlay of a few shillings. It means perhaps arranging for stoves to be fitted, plumbing, catering facilities of all kinds including urns, crocks, cups and saucers and so on to be provided. In fact, it might involve an outlay of a few hundred pounds.

Mr. Maude: Did it?

Dr. Summerskill: The hon. and learned Member says that, because one of our officials has made a mistake, we must penalise the club by revoking their licence and so involve them in a loss. I say that would be grossly unfair. The hon. and learned Gentleman said, to use his own words, "Justice should be done"——

Mr. Maude: No, I said that justice should be seen to be done.

Dr. Summerskill: I agree. He said that justice should be seen to be done. His interpretation of justice is that we should come along to this little club, which through no fault of its own has been mistakenly granted a licence, and revoke the licence because of the fault of one of our officers——

Mr. Maude: Mr. Mauderose—

Dr. Summerskill: I must ask the hon. and learned Gentleman not to interrupt. He would not like it in his court—

Mr. Maude: But the hon. Lady is misrepresenting me——

Dr. Summerskill: I cannot give way. The hon. Gentleman must be quiet and exercise patience. That is the reason why we have not revoked this licence, because it is a principle for us to stand by any mistakes of our officers. In fact, that is a principle of government. Any mistake made by a civil servant is defended by a Minister at this Box. It is the responsibility of the Minister, and therefore we have no intention of making this small club suffer because an official has made a mistake.
I should like the hon. and learned Gentleman to listen to this. I looked up some of these cases and asked my officials whether there had been anything similar. I was told that in 1945 the Birmingham Conservative Club was given a licence and that it appeared that this licence was mistakenly granted. It was then suggested that the licence should be revoked. It was laid down by the then Secretary the Ministry that it is a well-recognised principle in Government Departments that we must stand by our mistakes.
I quite agree that I did use that rather well-worn expression, "two blacks do not make a white." Because a mistake had been made on the case of the Civil Service Club, why should we say that the Heavitree Conservative Club should be given a licence? Surely one cannot proceed in that manner. A mistake having been made, it was right and proper for the food control committee to look at other applications in an objective manner, and not to be guided by a mistake made in the past. The Heavitree Conservative Club made its application. The food control committee considered it in the light of local conditions, and turned it down. It was then, quite rightly, referred to the divisional food officer. The divisional food officer had in mind the case that the hon. and learned Gentleman has already put. He was aware of the mistake already made in the case of the Civil Service Club. He asked the local food control committee to reconsider the case. He felt himself that there was no

case to consider, but he thought, "Let us be perfectly fair and reconsider it," because he felt that the Heavitree Conservative Club was feeling rather sore about the matter. The Exeter food control committee again considered the application of the Heavitree Conservative Club and again refused to grant it.
I must remind the House that the question we ask before the licence is granted is: Can the club operate efficiently without a licence? On the appeal, the Heavitree Conservative Club said that the members wished to visit the club for a mid-day snack, and again after business before catching buses to their homes. Surely, on this basis it was apparent that this catering licence should not be given in order that the club could develop its particular political activities. A catering licence for a club, it must be remembered, is considered in this special way because it is only serving the needs of a small number of people. The argument which the Heavitree Conservative Club put forward was the kind of argument to which we listen when an ordinary catering licence is asked for and when it is necessary to supply meals for those people who are unable to get home. This was the argument put forward on behalf of the Heavitree Conservative Club. In the circumstances the application was refused.
If we granted all these applications for licences, it would mean inevitably that the domestic ration would be threatened. We must look at all these applications extremely carefully. When I started I said that I was very glad that there was no hint that we were guilty of any political discrimination. In order to reassure the hon. and learned Member for Exeter, I want him to know that I have asked for details of licences granted to political clubs in his area, the South-Western Division, during the last year. The details show that two Conservative clubs, two Liberal clubs and one Labour club received licences. I asked for the total number of licences for the whole country. There were 290 applications of which 81 were granted and 209 refused. All but two of the licences were granted on priority grounds. That means that the clubs were catering before the war and now automatically became entitled to one. I think that hon. Gentlemen will agree that there is ample


proof there that there has been no political discrimination.
I wish to deal with the points raised by the hon. Member for Northwich (Mr. J. Foster). He applied for a licence for the Young Conservatives Club. All the arguments I have used apply in that case. The application was considered in the same way and it was refused on the same grounds.

Mr. Foster: Will the hon. Lady deal with the point that there are no local facilities?

Dr. Summerskill: I have dealt with that point in the letters. I think that the hon. Gentleman will agree that I have dealt with that matter.

Mr. Foster: No.

Dr. Summerskill: I have not been left very much time. May I deal with the point the hon. Gentleman raised about the Gladstone Club and the Knutsford Young Conservative Club? The Gladstone Club has been granted a licence in very similar circumstances to those that applied to the Exeter Civil Service Club.

The licence for the Knutsford Conservative Club was granted on priority grounds.

Mr. Foster: I did not mention the Knutsford Club.

Dr. Summerskill: The other club was the Weaverham Youth Club. The hon. Gentleman asked why that club should be granted a licence whereas the application of the Young Conservatives was refused. That is because the Weaverham Youth Club offers amenities for every boy in the neighbourhood irrespective of his politics. It is sponsored by the Ministry of Education and it is a pre-Service training centre. That is why it is automatically entitled to a licence.
I hope that in this comparatively short time I have been able to convince hon. Members opposite that although the clubs in which they are particularly interested, have been refused licences, we have considered the applications in the light of all these circumstances and there has been no discrimination against them.

Question put, and agreed to.

Adjourned accordingly at Half-past Ten o'Clock.